Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 09, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | LCNB CORP | ||
Entity Central Index Key | 1074902 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 9,312,226 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $143,422 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS: | ||
Cash and due from banks | $14,235 | $10,410 |
Interest-bearing demand deposits | 1,610 | 4,278 |
Total cash and cash equivalents | 15,845 | 14,688 |
Investment securities: | ||
Available-for-sale, at fair value | 285,365 | 258,241 |
Held-to-maturity, at cost | 22,725 | 16,323 |
Federal Reserve Bank stock, at cost | 2,346 | 1,603 |
Federal Home Loan Bank stock, at cost | 3,638 | 2,854 |
Loans, net | 695,835 | 570,766 |
Premises and equipment, net | 20,733 | 19,897 |
Goodwill | 27,638 | 14,186 |
Core deposit and other intangibles | 4,780 | 2,795 |
Bank owned life insurance | 21,936 | 21,280 |
Other assets | 7,225 | 9,705 |
TOTAL ASSETS | 1,108,066 | 932,338 |
Deposits: | ||
Noninterest-bearing | 213,303 | 164,912 |
Interest-bearing | 732,902 | 620,849 |
Total deposits | 946,205 | 785,761 |
Short-term borrowings | 16,645 | 8,655 |
Long-term debt | 11,357 | 12,102 |
Accrued interest and other liabilities | 8,164 | 6,947 |
TOTAL LIABILITIES | 982,371 | 813,465 |
SHAREHOLDERS' EQUITY: | ||
Preferred shares - no par value, authorized 1,000,000 shares, none outstanding | 0 | 0 |
Common shares - no par value, authorized 12,000,000 shares, issued 10,064,945 and 10,041,163 shares at December 31, 2014 and 2013, respectively | 67,181 | 66,785 |
Retained earnings | 69,394 | 65,475 |
Treasury shares at cost, 753,627 shares at December 31, 2014 and 2013 | -11,665 | -11,665 |
Accumulated other comprehensive income (loss), net of taxes | 785 | -1,722 |
TOTAL SHAREHOLDERS' EQUITY | 125,695 | 118,873 |
TOTAL LIABILITES AND SHAREHOLDERS' EQUITY | $1,108,066 | $932,338 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2013 |
SHAREHOLDERS' EQUITY: | ||
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Common shares, shares authorized (in shares) | 12,000,000 | 12,000,000 |
Common shares, shares issued (in shares) | 10,064,945 | 10,041,163 |
Treasury shares at cost (in shares) | 753,627 | 753,627 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INTEREST INCOME: | |||
Interest and fees on loans | $32,706 | $27,325 | $23,585 |
Interest on investment securities: | |||
Taxable | 3,757 | 3,369 | 3,737 |
Non-taxable | 2,713 | 2,573 | 2,441 |
Other investments | 301 | 230 | 175 |
TOTAL INTEREST INCOME | 39,477 | 33,497 | 29,938 |
INTEREST EXPENSE: | |||
Interest on deposits | 3,161 | 3,602 | 4,317 |
Interest on short-term borrowings | 22 | 25 | 16 |
Interest on long-term debt | 407 | 438 | 556 |
TOTAL INTEREST EXPENSE | 3,590 | 4,065 | 4,889 |
NET INTEREST INCOME | 35,887 | 29,432 | 25,049 |
PROVISION FOR LOAN LOSSES | 930 | 588 | 1,351 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 34,957 | 28,844 | 23,698 |
NON-INTEREST INCOME: | |||
Trust income | 2,903 | 2,518 | 2,317 |
Service charges and fees on deposit accounts | 4,838 | 4,155 | 3,605 |
Net gain on sales of securities | 149 | 1,060 | 1,853 |
Bank owned life insurance income | 671 | 678 | 578 |
Gains from sales of mortgage loans | 147 | 339 | 506 |
Other operating income | 434 | 340 | 190 |
TOTAL NON-INTEREST INCOME | 9,142 | 9,090 | 9,049 |
NON-INTEREST EXPENSE: | |||
Salaries and employee benefits | 15,762 | 13,487 | 11,614 |
Equipment expenses | 1,316 | 1,232 | 1,100 |
Occupancy expense, net | 2,232 | 2,042 | 1,671 |
State franchise tax | 955 | 846 | 790 |
Marketing | 703 | 561 | 526 |
Amortization of intangibles | 574 | 334 | 57 |
FDIC premiums | 660 | 499 | 405 |
ATM expense | 624 | 534 | 620 |
Computer maintenance and supplies | 794 | 616 | 524 |
Telephone expense | 690 | 566 | 465 |
Contracted services | 880 | 568 | 441 |
Other real estate owned | 285 | -30 | 490 |
Merger-related expenses | 1,400 | 1,433 | 79 |
Other non-interest expense | 3,969 | 3,524 | 2,900 |
TOTAL NON-INTEREST EXPENSE | 30,844 | 26,212 | 21,682 |
INCOME BEFORE INCOME TAXES | 13,255 | 11,722 | 11,065 |
PROVISION FOR INCOME TAXES | 3,386 | 2,942 | 2,795 |
NET INCOME | $9,869 | $8,780 | $8,270 |
Earnings per common share: | |||
Basic (in dollars per share) | $1.06 | $1.12 | $1.23 |
Diluted (in dollars per share) | $1.05 | $1.10 | $1.22 |
Weighted average shares outstanding: | |||
Basic (in shares) | 9,297,019 | 7,852,514 | 6,717,357 |
Diluted (in shares) | 9,406,346 | 7,982,997 | 6,802,475 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $9,869 | $8,780 | $8,270 |
Other comprehensive income (loss): | |||
Net unrealized gain (loss) on available-for-sale securities (net of taxes of $1,476, $2,940, and $473 for 2014, 2013, and 2012, respectively) | 2,865 | -5,706 | 918 |
Change in nonqualified pension plan unrecognized net gain (loss) and unrecognized prior service cost (net of taxes of $133, $38, and $1 for 2014, 2013, and 2012, respectively) | -260 | 73 | -2 |
Reclassification adjustment for: | |||
Net realized gain on sale of available-for-sale securities included in net income (net of taxes of $51, $418, and $630 for 2014, 2013 and 2012, respectively) | -98 | -810 | -1,223 |
Other comprehensive income (loss) | 2,507 | -6,443 | -307 |
TOTAL COMPREHENSIVE INCOME | 12,376 | 2,337 | 7,963 |
COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX, AS OF YEAR-END: | |||
Net unrealized gain (loss) on securities available-for-sale | 1,125 | -1,642 | 4,875 |
Net unfunded liability for nonqualified pension plan | -340 | -80 | -154 |
Balance at year-end | $785 | ($1,722) | $4,721 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other comprehensive income (loss): | |||
Net unrealized gain (loss) on available-for-sale securities, taxes | $1,476 | $2,940 | $473 |
Change in nonqualified pension plan unrecognized net gain (loss) and unrecognized prior service cost, taxes | 133 | 38 | 1 |
Net realized gain on sale of available-for-sale securities included in net income, taxes | $51 | $418 | $630 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Shares [Member] | Retained Earnings [Member] | Treasury Shares [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $77,960 | $26,753 | $57,877 | ($11,698) | $5,028 |
Balance (in shares) at Dec. 31, 2011 | 6,704,723 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 8,270 | 8,270 | |||
Other comprehensive gain (loss), net of taxes | -307 | -307 | |||
Dividend Reinvestment and Stock Purchase Plan (in shares) | 25,033 | ||||
Dividend Reinvestment and Stock Purchase Plan | 332 | 332 | |||
Exercise of stock options (in shares) | 2,144 | 2,144 | |||
Exercise of stock options | 28 | -5 | 33 | ||
Excess tax (benefit) expense on exercise and forfeiture of stock options | -19 | -19 | |||
Compensation expense relating to stock options | 41 | 41 | |||
Common stock dividends, $0.64 per share | -4,299 | -4,299 | |||
Balance at Dec. 31, 2012 | 82,006 | 27,107 | 61,843 | -11,665 | 4,721 |
Balance (in shares) at Dec. 31, 2012 | 6,731,900 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 8,780 | 8,780 | |||
Other comprehensive gain (loss), net of taxes | -6,443 | -6,443 | |||
Issuance of common stock (in shares) | 1,642,857 | ||||
Issuance of common stock | 26,909 | 26,909 | |||
Dividend Reinvestment and Stock Purchase Plan (in shares) | 18,348 | ||||
Dividend Reinvestment and Stock Purchase Plan | 329 | 329 | |||
Acquisition of First Capital Bancshares, Inc. (in shares) | 888,811 | ||||
Acquisition of First Capital Bancshares, Inc. | 12,321 | 12,321 | |||
Exercise of stock options (in shares) | 5,620 | 5,620 | |||
Exercise of stock options | 70 | 70 | |||
Excess tax (benefit) expense on exercise and forfeiture of stock options | 12 | 12 | |||
Compensation expense relating to stock options | 37 | 37 | |||
Common stock dividends, $0.64 per share | -5,148 | -5,148 | |||
Balance at Dec. 31, 2013 | 118,873 | 66,785 | 65,475 | -11,665 | -1,722 |
Balance (in shares) at Dec. 31, 2013 | 9,287,536 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 9,869 | 9,869 | |||
Other comprehensive gain (loss), net of taxes | 2,507 | 2,507 | |||
Dividend Reinvestment and Stock Purchase Plan (in shares) | 23,782 | ||||
Dividend Reinvestment and Stock Purchase Plan | 372 | 372 | |||
Exercise of stock options (in shares) | 0 | ||||
Compensation expense relating to stock options | 24 | 24 | |||
Common stock dividends, $0.64 per share | -5,950 | -5,950 | |||
Balance at Dec. 31, 2014 | $125,695 | $67,181 | $69,394 | ($11,665) | $785 |
Balance (in shares) at Dec. 31, 2014 | 9,311,318 |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock dividends (in dollars per share) | $0.64 | $0.64 | $0.64 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $9,869 | $8,780 | $8,270 |
Adjustments to reconcile net income to net cash flows from operating activities- | |||
Depreciation, amortization and accretion | 2,991 | 2,212 | 3,072 |
Provision for loan losses | 930 | 588 | 1,351 |
Deferred income tax provision (benefit) | 192 | 192 | 31 |
Increase in cash surrender value of bank owned life insurance | -671 | -678 | -578 |
Realized gain on sales of securities available-for-sale | -149 | -1,060 | -1,853 |
Realized (gain) loss on sale of premises and equipment | -128 | 18 | -10 |
Realized (gain) loss from sale and write-downs of other real estate owned and repossessed assets | 85 | -182 | 295 |
Origination of mortgage loans for sale | -7,480 | -19,267 | -28,084 |
Realized gains from sales of mortgage loans | -147 | -339 | -506 |
Proceeds from sales of mortgage loans | 7,552 | 19,415 | 28,307 |
Compensation expense related to stock options | 24 | 37 | 41 |
Excess tax (benefit) expense on exercise and forfeiture of stock options | 0 | 12 | -19 |
Increase (decrease) due to changes in assets and liabilities: | |||
Income receivable | 414 | 100 | 236 |
Other assets | 1,898 | 370 | -307 |
Other liabilities | 560 | 248 | 743 |
TOTAL ADJUSTMENTS | 6,071 | 1,666 | 2,719 |
NET CASH FLOWS FROM OPERATING ACTIVITIES | 15,940 | 10,446 | 10,989 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from sales of investment securities available-for-sale | 67,296 | 59,284 | 90,573 |
Proceeds from maturities and calls of investment securities: | |||
Available-for-sale | 36,716 | 26,496 | 37,669 |
Held-to-maturity | 4,688 | 9,172 | 2,648 |
Purchases of investment securities: | |||
Available-for-sale | -92,180 | -74,083 | -132,836 |
Held-to-maturity | -11,090 | -9,687 | -7,338 |
Proceeds from redemption of Federal Reserve Bank stock | 41 | 0 | 0 |
Purchase of Federal Reserve Bank stock | -743 | -497 | -9 |
Net (increase) decrease in loans | -10,081 | -21,352 | 5,729 |
Purchase of bank owned life insurance | 0 | 0 | -1,500 |
Proceeds from redemption of bank owned life insurance | 3,633 | 0 | 0 |
Proceeds from sales of other real estate owned and repossessed assets | 750 | 1,173 | 33 |
Additions to other real estate owned | -45 | -7 | -16 |
Purchases of premises and equipment | -1,052 | -858 | -478 |
Proceeds from sales of premises and equipment | 179 | 1 | 14 |
Net cash acquired from (paid for) acquisition | -9,114 | 9,771 | 0 |
NET CASH FLOWS USED IN INVESTING ACTIVITIES | -11,002 | -587 | -5,511 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net increase (decrease) in deposits | -4,797 | -22,310 | 7,909 |
Net increase (decrease) in short-term borrowings | 7,339 | -5,101 | -7,840 |
Principal payments on long-term debt | -745 | -3,395 | -7,668 |
Proceeds from issuance of common stock | 58 | 26,950 | 49 |
Exercise of stock options | 0 | 70 | 28 |
Cash dividends paid on common stock | -5,636 | -4,860 | -4,016 |
NET CASH FLOWS USED IN FINANCING ACTIVITIES | -3,781 | -8,646 | -11,538 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 1,157 | 1,213 | -6,060 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 14,688 | 13,475 | 19,535 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 15,845 | 14,688 | 13,475 |
CASH PAID DURING THE YEAR FOR: | |||
Interest | 3,502 | 4,097 | 4,967 |
Income taxes | 2,610 | 3,685 | 2,165 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITY: | |||
Transfer from loans to other real estate owned and repossessed assets | $435 | $131 | $859 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
LCNB Corp. (the "Company" or “LCNB”), an Ohio corporation formed in December 1998, is a financial holding company whose principal activity is the ownership of LCNB National Bank (the "Bank"). The Bank was founded in 1877 and provides full banking services, including trust and brokerage services, to customers primarily in Southwestern and South Central Ohio. | ||
BASIS OF PRESENTATION | ||
The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions are eliminated in consolidation. The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles and with general practices in the banking industry. | ||
Certain prior period data presented in the financial statements have been reclassified to conform with the current year presentation. These reclassifications had no effect on net income. | ||
USE OF ESTIMATES | ||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
CASH AND CASH EQUIVALENTS | ||
For purposes of reporting cash flows, cash and cash equivalents include cash, balances due from banks, federal funds sold, and interest-bearing demand deposits with original maturities of three months or less. Deposits with other banks routinely have balances greater than FDIC insured limits. Management considers the risk of loss to be very low with respect to such deposits. | ||
INVESTMENT SECURITIES | ||
Certain municipal debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and recorded at amortized cost. Securities not classified as held-to-maturity are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income, a separate component of shareholders’ equity. Amortization of premiums and accretion of discounts are recognized as adjustments to interest income using the level-yield method. Realized gains or losses from the sale of securities are recorded on the trade date and are computed using the specific identification method. | ||
Declines in the fair value of securities below their cost that are deemed to be other-than-temporarily impaired and for which the Company does not intend to sell the securities and it is not more likely than not that the securities will be sold before the anticipated recovery of the impairment are separated into losses related to credit factors and losses related to other factors. The losses related to credit factors are recognized in earnings and losses related to other factors are recognized in other comprehensive income. In estimating other than temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The Company's consolidated statements of income as of December 31, 2014, 2013, and 2012, do not reflect any such impairment. | ||
Federal Home Loan Bank ("FHLB") stock is an equity interest in the Federal Home Loan Bank of Cincinnati. It can be sold only at its par value of $100 per share and only to the FHLB or to another member institution. In addition, the equity ownership rights are more limited than would be the case for a public company because of the oversight role exercised by the Federal Housing Finance Agency in the process of budgeting and approving dividends. Federal Reserve Bank stock is similarly restricted in marketability and value. Both investments are carried at cost, which is their par value. | ||
FHLB and Federal Reserve Bank stock are both subject to minimum ownership requirements by member banks. The required investments in common stock are based on predetermined formulas. | ||
LOANS | ||
The Company’s loan portfolio includes most types of commercial and industrial loans, commercial loans secured by real estate, residential real estate loans, consumer loans, agricultural loans and other types of loans. Most of the properties collateralizing the loan portfolio are located within the Company’s market area. | ||
Loans are stated at the principal amount outstanding, net of unearned income, deferred origination fees and costs, and the allowance for loan losses. Interest income is accrued on the unpaid principal balance. The delinquency status of a loan is based on contractual terms and not on how recently payments have been received. Generally, a loan is placed on non-accrual status when it is classified as impaired or there is an indication that the borrower’s cash flow may not be sufficient to make payments as they come due, unless the loan is well secured and in the process of collection. Subsequent cash receipts on non-accrual loans are recorded as a reduction of principal and interest income is recorded once principal recovery is reasonably assured. The current year's accrued interest on loans placed on non-accrual status is charged against earnings. Previous years' accrued interest is charged against the allowance for loan losses. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer a reasonable doubt as to the timely collection of interest or principal. | ||
Loan origination fees and certain direct loan origination costs are deferred and the net amount amortized as an adjustment of loan yields. These amounts are being amortized over the lives of the related loans. | ||
In the ordinary course of business, the Company enters into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan losses. | ||
ALLOWANCE FOR LOAN LOSSES | ||
The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely. Consumer loans are charged off when they reach 120 days past due. Subsequent recoveries, if any, are credited to the allowance. | ||
The provision for loan losses is determined by management based upon its evaluation of the amount needed to maintain the allowance for loan losses at a level considered appropriate in relation to the estimated risk of losses inherent in the portfolio. Current methodology used by management to estimate the allowance takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, historic categorical trends, current delinquency levels as related to historical levels, portfolio growth rates, changes in composition of the portfolio, the current economic environment, as well as current allowance adequacy in relation to the portfolio. Management is cognizant that reliance on historical information coupled with the cyclical nature of the economy, including credit cycles, affects the allowance. Management considers all of these factors prior to making any adjustments to the allowance due the subjectivity and imprecision involved in allocation methodology. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. | ||
The allowance consists of specific and general components. The specific component relates to loans that are specifically reviewed for impairment. For such loans, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers loans not specifically reviewed for impairment and homogeneous loan pools, such as residential real estate and consumer loans. The general component is measured for each loan category separately based on each category’s average of historical loss experience over a trailing thirty-six month period, adjusted for qualitative factors. Such qualitative factors may include current economic conditions if different from the three-year historical loss period, trends in underperforming loans, trends in volume and terms of loan categories, concentrations of credit, and trends in loan quality. | ||
A loan is considered impaired when management believes, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. An impaired loan is measured by the present value of expected future cash flows using the loan's effective interest rate. An impaired collateral-dependent loan may be measured based on collateral value. Smaller-balance homogeneous loans, including residential mortgage and consumer installment loans, that are not evaluated individually are collectively evaluated for impairment. | ||
Loans acquired from the merger are recorded at fair value with no carryover of the acquired entity's previously established allowance for loan losses. The excess of expected cash flows over the estimated fair value of acquired loans is recognized as interest income over the remaining contractual lives of the loans using the level yield method. | ||
Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then-remaining contractual lives of the loans. | ||
Impaired loans acquired are accounted for under FASB ASC 310-30. Factors considered in evaluating whether an acquired loan was impaired include delinquency status and history, updated borrower credit status, collateral information, and updated loan-to-value information. The difference between contractually required payments at the time of acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. The interest component of the cash flows expected to be collected is referred to as the accretable yield and is recognized as interest income over the remaining contractual life of the loan using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in a reclassification from the nonaccretable difference to the accretable yield. | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on both the straight-line and accelerated methods over the estimated useful lives of the assets, generally 15 to 40 years for premises and 3 to 10 years for equipment. Leasehold improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Costs incurred for maintenance and repairs are expensed as incurred. | ||
OTHER REAL ESTATE OWNED | ||
Other real estate owned includes properties acquired through foreclosure or deed in lieu of foreclosure. Such property is held for sale and is initially recorded at fair value, less costs to sell, establishing a new cost basis. Fair value is primarily based on a property appraisal obtained at the time of transfer and any periodic updates that may be obtained thereafter. The allowance for loan losses is charged for any write down of the loan’s carrying value to fair value at the date of acquisition. Any subsequent reductions in fair value and expenses incurred from holding other real estate owned are charged to other non-interest expense. Costs, excluding interest, relating to the improvement of other real estate owned are capitalized. Gains and losses from the sale of other real estate owned are included in other non-interest expense. | ||
Other real estate owned also includes in-substance foreclosed properties, which are properties that the Company has taken physical control of, regardless of whether formal foreclosure proceedings have occurred. | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill is the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is not amortized, but is instead subject to an annual review for impairment. | ||
Mortgage servicing rights on originated mortgage loans that have been sold are initially recorded at their estimated fair values. Mortgage servicing rights are amortized to loan servicing income in proportion to and over the period of estimated servicing income. Such assets are periodically evaluated as to the recoverability of their carrying value. | ||
The Company’s other intangible asset relates to core deposits acquired from business combinations. These intangible assets are amortized on a straight-line basis over their estimated useful lives. Management evaluates whether events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised. | ||
BANK OWNED LIFE INSURANCE | ||
The Company has purchased life insurance policies on certain officers of the Company. The Company is the beneficiary of these policies and has recorded the estimated cash surrender value in other assets in the consolidated balance sheets. Income on the policies, based on the increase in cash surrender value and any incremental death benefits, is included in other non-interest income in the consolidated statements of income. | ||
FAIR VALUE MEASUREMENTS | ||
Accounting guidance establishes a fair value hierarchy to prioritize the inputs to valuation techniques used to measure fair value. A financial instrument’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The three broad input levels are: | ||
• | Level 1 – quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the reporting date; | |
• | Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly; and | |
• | Level 3 - inputs that are unobservable for the asset or liability. | |
Accounting guidance permits, but does not require, companies to measure many financial instruments and certain other items at fair value. The decision to elect the fair value option is made individually for each instrument and is irrevocable once made. Changes in fair value for the selected instruments are recorded in earnings. The Company did not select any financial instruments for the fair value election in 2014 or 2013. | ||
ADVERTISING EXPENSE | ||
Advertising costs are expensed as incurred and are recorded as a marketing expense, a component of non-interest expense. | ||
PENSION PLANS | ||
Eligible employees of the Company hired before 2009 participate in a multiple-employer qualified noncontributory defined benefit retirement plan. This plan is accounted for as a multi-employer plan because assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. | ||
Citizens National Bank had a qualified noncontributory, defined benefit pension plan, which has been assumed by the Company, that covers eligible employees hired before May 1, 2005. This is a single employer plan. | ||
TREASURY STOCK | ||
Common stock shares repurchased are recorded at cost. Cost of shares retired or reissued is determined using the weighted average method. | ||
STOCK OPTIONS | ||
The cost of employee services received in exchange for stock option grants is the grant-date fair value of the award estimated using an option-pricing model. This estimated cost is recognized over the period the employee is required to provide services in exchange for the award, usually the vesting period. The Company uses a Black-Scholes pricing model and related assumptions for estimating the fair value of stock option grants and a five-year vesting period. | ||
INCOME TAXES | ||
Deferred income taxes are determined using the liability method of accounting. Under this method, the net deferred tax asset or liability is determined based on the tax effects of temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. | ||
Management analyzes material tax positions taken in any income tax return for any tax jurisdiction and determines the likelihood of the positions being sustained in a tax examination. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. | ||
EARNINGS PER SHARE | ||
Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is adjusted for the dilutive effects of stock options and warrants. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options and warrants with the proceeds used to purchase treasury shares at the average market price for the period. | ||
RECENT ACCOUNTING PRONOUNCEMENTS | ||
Financial Accounting Standards Board Accounting Standards Update ("ASU") No. 2014-01, "Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-01 was issued in January 2014 and provides guidance on accounting for investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credits. Entities are permitted to make an accounting policy election to account for such investments using the proportional amortization method, as defined, if certain enumerated conditions are met. Under the proportional amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). Investments not accounted for using the proportional amortization method should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323. ASU No. 2014-01 is effective for public companies for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014 and is to be applied retrospectively to all periods presented. LCNB currently does not have any investments in qualified affordable housing projects and adoption of ASU No. 2014-01 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-04, "Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-04 was issued in January 2014 and clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor through completion of a deed in lieu of foreclosure or through a similar legal agreement. In addition, the update requires interim and annual disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate properties that are in the process of foreclosure. ASU No. 2014-04 is effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Adoption of ASU No. 2014-04 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" | ||
ASU No. 2014-08 was issued in April 2014 and changes the criteria for reporting discontinued operations and provides for expanded disclosures in this area. The new guidance provides that only disposals representing a strategic shift in operations should be presented as discontinued operations and that these strategic shifts should have a major effect on an organization's operations and financial results. ASU No. 2014-08 is effective in the first quarter of 2015 for public companies with calendar year-ends. | ||
ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" | ||
ASU No. 2014-09 was issued in May 2014 and and supersedes most current revenue recognition guidance for contracts to transfer goods or services or other nonfinancial assets. Lease contracts, insurance contracts, and most financial instruments are not included in the scope of this update. ASU No. 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Additional disclosures providing information about contracts with customers are required. ASU No. 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Transitional guidance is included in the update; early adoption is not permitted. Since LCNB's products are substantially financial in nature, adoption of ASU No. 2014-09 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-11, "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures" | ||
ASU No. 2014-11 was issued in June 2014 and requires two accounting changes: | ||
• | the accounting for repurchase-to-maturity transactions is changed to secured borrowing accounting, and | |
• | for repurchase financing arrangements, separate accounting is required for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which results in secured borrowing accounting. | |
Additional disclosures are required. ASU No. 2014-11 is effective for public business entities for the first interim or annual period beginning after December 15, 2014. Changes in accounting for transactions outstanding on the effective date are to be recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Since LCNB already accounts for repurchase agreements as borrowings, this update is not expected to have a material impact on LCNB's results of operation or financial position. | ||
ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, a consensus of the FASB Emerging Issues Task Force" | ||
ASU No. 2014-12 was issued in June 2014 and requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and that current guidance for awards with performance conditions be followed. ASU No. 2014-12 is effective for all entities for annual and interim periods beginning after December 15, 2015 and early adoption is permitted. Entities may apply the amendments in the update either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. None of LCNB's currently outstanding stock option grants contain the performance targets described in this update and adoption of ASU No. 2014-11 is not expected to have a material impact on its results of operations or financial position. | ||
ASU No. 2014-13, "Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-13 was issued in August 2014 and applies to entities that are required to (1) consolidate a collateralized financing entity ("CFE") under the guidance for Variable Interest Entities, (2) measure all of the financial assets and financial liabilities of the CFE at fair value, and (3) reflect the changes in fair value in earnings. Under ASU 2014-13, entities that meet these criteria can elect to measure both the financial assets and the financial liabilities of the CFE using the more observable of the fair value of the financial assets and the fair value of the financial liabilities, thereby eliminating the difference between the fair value of financial assets and financial liabilities. If that alternative is not elected, then ASU 2014-13 indicates that the fair value of the financial assets and the fair value of the financial liabilities of the consolidated CFE should be measured in accordance with ASC 820, Fair Value Measurement, and differences between the fair value of the financial assets and the financial liabilities of the consolidated CFE should be reflected in earnings and attributed to the reporting entity in the consolidated statement of income or loss. The provisions of ASU 2014-13 are effective for public business entities for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. LCNB currently does not have any CFE investments and adoption of ASU No. 2014-13 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-14, "Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-14 was issued in August 2014 and affects creditors with government-guaranteed residential mortgage loans, including those guaranteed by the Federal Housing Administration and the U.S. Department of Veterans Affairs. ASU No. 2014-14 requires that a residential mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions described in the update are met. The amendments in ASU No. 2014-14 are in effect for public business entities for annual periods, and interim periods within such periods, starting after December 15, 2014. LCNB currently does not hold any government-guaranteed residential mortgage loans and adoption of ASU No. 2014-14 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern" | ||
ASU No. 2014-15 was issued in August 2014 and requires management to evaluate for each annual and interim reporting period whether it is probable that the entity will not be able to meet its obligations as they become due within one year after the date that financial statements are issued (or are available to be issued, where applicable). Certain disclosures, as described in the update, are required if management identifies substantial doubt about the entity's ability to continue as a going concern. ASU No. 2014-15 will take effect in the annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. Adoption of ASU No. 2014-15 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-16, "Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-16 was issued in November 2014 and requires an entity to determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of the relevant facts and circumstances, when evaluating whether the host contract is more akin to a debt or equity instrument. ASU No. 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The effects of initially adopting ASU No. 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the update is effective. Retrospective application to all relevant prior periods is permitted. Early adoption, including adoption in an interim period, is permitted. LCNB currently does not have any outstanding hybrid financial instruments issued as a share and adoption of ASU No. 2014-16 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-17, "Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-17 was issued in November 2014 and applies to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity upon the occurrence of an event in which an acquirer obtains control of the acquired entity. The update allows an acquired entity the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurred, an acquired entity has the option to apply pushdown accounting in a subsequent reporting period provided the change in considered a change in accounting principle in accordance with Topic 250, "Accounting Changes and Error Corrections." Certain disclosures are required if pushdown accounting is elected. An election to apply pushdown accounting is irrevocable. ASU No. 2014-17 is effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. LCNB currently does not have any subsidiaries issuing separate financial statements and adoption of ASU No. 2014-17 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" | ||
ASU No. 2015-01 was issued in January 2015 and eliminates from the income statement the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. Adoption of ASU No. 2015-01 is not expected to have a material impact on LCNB's results of operations. | ||
ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" | ||
ASU No. 2015-02 was issued in February 2015 and provides additional guidance for consolidation of legal entities. It (1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (2) eliminates the presumption that a general partner should consolidate a limited partnership, (3) affects the consolidation analysis of reporting entities that are involved with variable interest entities, and (4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Adoption of ASU No. 2015-02 is not expected to have a material impact on LCNB's results of operations or financial position. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Business Combinations [Abstract] | ||||||||||
Acquisitions | ACQUISITIONS | |||||||||
On October 9, 2012, LCNB and First Capital Bancshares, Inc. ("First Capital") entered into an Agreement and Plan of Merger pursuant to which First Capital was merged into LCNB on January 11, 2013 in a stock and cash transaction valued at approximately $20.2 million. Immediately following the merger of First Capital into LCNB, Citizens National Bank of Chillicothe ("Citizens"), a wholly-owned subsidiary of First Capital, was merged into LCNB National Bank. Citizens operated six full–service branches with a main office and two other facilities in Chillicothe, Ohio and one branch in each of Frankfort, Ohio, Clarksburg, Ohio, and Washington Court House, Ohio. These offices became branches of the Bank after the merger. | ||||||||||
The merger with First Capital was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands): | ||||||||||
Consideration Paid: | ||||||||||
Common shares issued (888,811) | $ | 12,354 | ||||||||
Cash paid to shareholders | 7,828 | |||||||||
Total value of consideration paid | 20,182 | |||||||||
Identifiable Assets Acquired: | ||||||||||
Cash and cash equivalents | 17,632 | |||||||||
Investment securities: | ||||||||||
Available-for-sale | 21,606 | |||||||||
Held-to-maturity | 384 | |||||||||
Federal Reserve Bank stock | 157 | |||||||||
Federal Home Loan Bank stock | 763 | |||||||||
Loans | 98,904 | |||||||||
Premises and equipment | 3,949 | |||||||||
Bank owned life insurance | 3,687 | |||||||||
Core deposit intangible | 2,574 | |||||||||
Other real estate owned | 127 | |||||||||
Deferred income taxes | 185 | |||||||||
Other assets | 1,380 | |||||||||
Total identifiable assets acquired | 151,348 | |||||||||
Liabilities Assumed: | ||||||||||
Deposits | 136,823 | |||||||||
Long-term debt | 1,792 | |||||||||
Other liabilities | 822 | |||||||||
Total liabilities assumed | 139,437 | |||||||||
Total Identifiable Net Assets Acquired | 11,911 | |||||||||
Goodwill resulting from merger | $ | 8,271 | ||||||||
The amount of goodwill recorded reflects LCNB's entrance into a new market and related synergies that are expected to result from the acquisition and represents the excess purchase price over the estimated fair value of the net assets acquired. The goodwill will not be amortizable and is not deductible for tax purposes. The core deposit intangible will be amortized over nine years using the straight-line method. | ||||||||||
On October 28, 2013, LCNB and Colonial Banc Corp. (“Colonial”) entered into a Stock Purchase Agreement (“Purchase Agreement”) pursuant to which LCNB purchased from Colonial on January 24, 2014 all of the issued and outstanding shares of Eaton National Bank & Trust Co. ("Eaton National") in a cash transaction valued at $24.75 million. Immediately following the acquisition, Eaton National was merged into the Bank. Eaton National operated five full–service branches with a main office and another facility in Eaton, Ohio and branch offices in each of West Alexandria, Ohio, New Paris, Ohio, and Lewisburg, Ohio. These offices became branches of the Bank after the merger. | ||||||||||
The merger with Eaton National was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands): | ||||||||||
Consideration Paid: | ||||||||||
Cash paid to shareholder | $ | 24,750 | ||||||||
Identifiable Assets Acquired: | ||||||||||
Cash and cash equivalents | 15,635 | |||||||||
Investment securities: | ||||||||||
Available-for-sale | 35,859 | |||||||||
Federal Reserve Bank stock | 41 | |||||||||
Federal Home Loan Bank stock | 784 | |||||||||
Loans | 115,944 | |||||||||
Premises and equipment | 1,314 | |||||||||
Bank owned life insurance | 3,618 | |||||||||
Core deposit intangible | 2,466 | |||||||||
Other real estate owned | 262 | |||||||||
Other assets | 1,624 | |||||||||
Total identifiable assets acquired | 177,547 | |||||||||
Liabilities Assumed: | ||||||||||
Deposits | 165,335 | |||||||||
Short-term borrowings | 651 | |||||||||
Other liabilities | 263 | |||||||||
Total liabilities assumed | 166,249 | |||||||||
Total Identifiable Net Assets Acquired | 11,298 | |||||||||
Goodwill resulting from merger | $ | 13,452 | ||||||||
The amount of goodwill recorded reflects LCNB's entrance into a new market and related synergies that are expected to result from the acquisition and represents the excess purchase price over the estimated fair value of the net assets acquired. The goodwill will not be amortizable on LCNB's financial records, but is deductible for tax purposes. The core deposit intangible is being amortized over eight years using the straight-line method. | ||||||||||
Direct costs related to the First Capital and Eaton National acquisitions were expensed as incurred and are recorded as merger-related expenses in the consolidated statements of income. | ||||||||||
The results of operations are included in the consolidated statement of income from the dates of the mergers. The estimated amount of Eaton National's revenue (net interest income plus non-interest income) and net income, excluding merger and data conversion costs, included in LCNB's consolidated statement of income for 2014 were as follows (in thousands): | ||||||||||
Total revenue | $ | 6,608 | ||||||||
Net income | 2,997 | |||||||||
The following table presents unaudited pro forma information as if the merger with Eaton National had occurred on January 1, 2012 (in thousands). This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of the core deposit intangible, and related income tax effects. It does not include merger and data conversion costs. The pro forma information does not necessarily reflect the results of operations that would have occurred had the merger with First Capital occurred in 2012. In particular, expected operational cost savings are not reflected in the pro forma amounts. | ||||||||||
For Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||
Total revenue | $ | 44,768 | 47,183 | 43,287 | ||||||
Net income | 10,275 | 10,670 | 10,668 | |||||||
Basic earnings per common share | 1.11 | 1.36 | 1.28 | |||||||
Diluted earnings per common share | 1.09 | 1.34 | 1.26 | |||||||
On December 29, 2014, LCNB and BNB Bancorp, Inc. (“BNB”) entered into an Agreement and Plan of Merger (“Merger Agreement”) pursuant to which BNB will be merged into LCNB in a stock and cash transaction valued at $12,574,170. Immediately following the merger of BNB into LCNB, Brookville National Bank ("Brookville"), a wholly-owned subsidiary of BNB, will be merged into LCNB National Bank. Brookville operates a main office and a branch office, both in Brookville, Ohio. These offices will become branches of LCNB after the merger. | ||||||||||
Under the terms of the Merger Agreement, the shareholders of BNB common stock will be entitled to receive, for each share of BNB Common Stock, (i) $15.75 in cash and (ii) 2.005 LCNB common shares. | ||||||||||
The acquisition will be accounted for in accordance with applicable accounting guidance. Accordingly, the assets and liabilities of BNB will be recorded at their estimated fair values at the acquisition date. The excess of the cash paid over the net fair values of the assets acquired, including identifiable intangible assets and liabilities assumed, will be recorded as goodwill. The results of operations will be included in the consolidated income statement from the date of the acquisition. Goodwill will be subject to an annual test for impairment and the amount impaired, if any, will be charged to expense at the time of impairment. | ||||||||||
The estimated fair values of the assets and liabilities have not yet been determined. The recorded amounts reflected on the historic financial records of BNB as of December 31, 2014 include total assets of approximately $108.8 million, consisting primarily of net loans of $36.4 million and investments of $58.3 million. Recorded liabilities totaling approximately $98.2 million consisted primarily of deposits totaling $97.9 million. |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
INVESTMENT SECURITIES | INVESTMENT SECURITIES | ||||||||||||
The amortized cost and fair value of available-for-sale investment securities at December 31 are summarized as follows (in thousands): | |||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
2014 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 62,406 | 290 | 136 | 62,560 | ||||||||
U.S. Agency notes | 84,661 | 188 | 1,212 | 83,637 | |||||||||
U.S. Agency mortgage-backed securities | 37,838 | 413 | 219 | 38,032 | |||||||||
Certificates of deposit | 3,076 | 10 | — | 3,086 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 75,727 | 1,972 | 304 | 77,395 | |||||||||
Taxable | 16,005 | 465 | 75 | 16,395 | |||||||||
Mutual funds | 2,483 | — | 22 | 2,461 | |||||||||
Trust preferred securities | 50 | — | — | 50 | |||||||||
Equity securities | 1,415 | 372 | 38 | 1,749 | |||||||||
$ | 283,661 | 3,710 | 2,006 | 285,365 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 22,525 | 108 | 695 | 21,938 | ||||||||
Taxable | 200 | — | — | 200 | |||||||||
$ | 22,725 | 108 | 695 | 22,138 | |||||||||
2013 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 13,184 | — | 290 | 12,894 | ||||||||
U.S. Agency notes | 110,248 | 141 | 3,714 | 106,675 | |||||||||
U.S. Agency mortgage-backed securities | 40,602 | 555 | 848 | 40,309 | |||||||||
Certificates of deposit | 1,492 | 9 | — | 1,501 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 74,185 | 2,116 | 968 | 75,333 | |||||||||
Taxable | 17,020 | 503 | 214 | 17,309 | |||||||||
Mutual funds | 2,419 | — | 39 | 2,380 | |||||||||
Trust preferred securities | 149 | 4 | 6 | 147 | |||||||||
Equity securities | 1,429 | 329 | 65 | 1,693 | |||||||||
$ | 260,728 | 3,657 | 6,144 | 258,241 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 15,923 | 159 | 285 | 15,797 | ||||||||
Taxable | 400 | — | 1 | 399 | |||||||||
$ | 16,323 | 159 | 286 | 16,196 | |||||||||
Information concerning securities with gross unrealized losses at December 31, 2014 and 2013, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (in thousands): | |||||||||||||
Less Than Twelve Months | Twelve Months or More | ||||||||||||
Fair | Unrealized | Fair | Unrealized | ||||||||||
Value | Losses | Value | Losses | ||||||||||
2014 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 9,141 | 7 | 8,774 | 129 | ||||||||
U.S. Agency notes | — | — | 65,971 | 1,212 | |||||||||
U.S. Agency mortgage-backed securities | 3,795 | 2 | 11,456 | 217 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 7,211 | 58 | 11,419 | 246 | |||||||||
Taxable | 3,117 | 15 | 3,668 | 60 | |||||||||
Mutual funds | 281 | 12 | 1,190 | 10 | |||||||||
Trust preferred securities | 50 | — | — | — | |||||||||
Equity securities | 197 | 29 | 123 | 9 | |||||||||
$ | 23,792 | 123 | 102,601 | 1,883 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 8,152 | 540 | 4,200 | 155 | ||||||||
Taxable | — | — | — | — | |||||||||
$ | 8,152 | 540 | 4,200 | 155 | |||||||||
2013 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 12,894 | 290 | — | — | ||||||||
U.S. Agency notes | 89,080 | 2,880 | 9,636 | 834 | |||||||||
U.S. Agency mortgage-backed securities | 17,557 | 575 | 5,130 | 273 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 15,641 | 398 | 10,751 | 570 | |||||||||
Taxable | 4,903 | 202 | 1,252 | 12 | |||||||||
Mutual funds | 1,380 | 39 | — | — | |||||||||
Trust preferred securities | — | — | 93 | 6 | |||||||||
Equity securities | 300 | 44 | 93 | 21 | |||||||||
$ | 141,755 | 4,428 | 26,955 | 1,716 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 4,890 | 285 | — | — | ||||||||
Taxable | 399 | 1 | — | — | |||||||||
$ | 5,289 | 286 | — | — | |||||||||
Management has determined that the unrealized losses at December 31, 2014 are primarily due to fluctuations in market interest rates and do not reflect credit quality deterioration of the securities. Because the Company does not have the intent to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost, the Company does not consider these investments to be other-than-temporarily impaired. | |||||||||||||
Contractual maturities of investment securities at December 31, 2014 were as follows (in thousands). Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations. | |||||||||||||
Available-for-Sale | Held-to-Maturity | ||||||||||||
Amortized | Fair | Amortized | Fair | ||||||||||
Cost | Value | Cost | Value | ||||||||||
Due within one year | $ | 10,961 | 11,071 | 2,649 | 2,661 | ||||||||
Due from one to five years | 133,901 | 134,894 | 3,669 | 3,665 | |||||||||
Due from five to ten years | 92,453 | 92,493 | 4,175 | 4,063 | |||||||||
Due after ten years | 4,560 | 4,615 | 12,232 | 11,749 | |||||||||
241,875 | 243,073 | 22,725 | 22,138 | ||||||||||
U.S. Agency mortgage-backed securities | 37,838 | 38,032 | — | — | |||||||||
Mutual funds | 2,483 | 2,461 | — | — | |||||||||
Trust preferred securities | 50 | 50 | — | — | |||||||||
Equity securities | 1,415 | 1,749 | — | — | |||||||||
$ | 283,661 | 285,365 | 22,725 | 22,138 | |||||||||
Investment securities with a market value of $175,094,000 and $157,956,000 at December 31, 2014 and 2013, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. | |||||||||||||
Certain information concerning the sale of investment securities available-for-sale for the years ended December 31 was as follows (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Proceeds from sales | $ | 67,296 | 59,284 | 90,573 | |||||||||
Gross realized gains | 252 | 1,234 | 1,860 | ||||||||||
Gross realized losses | 103 | 174 | 7 | ||||||||||
LOANS
LOANS | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||
LOANS | LOANS | |||||||||||||||||||||
Major classifications of loans at December 31 were as follows (in thousands): | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 35,424 | 29,337 | |||||||||||||||||||
Commercial, secured by real estate | 379,141 | 314,252 | ||||||||||||||||||||
Residential real estate | 254,087 | 215,587 | ||||||||||||||||||||
Consumer | 18,006 | 12,643 | ||||||||||||||||||||
Agricultural | 11,472 | 2,472 | ||||||||||||||||||||
Other loans, including deposit overdrafts | 680 | 91 | ||||||||||||||||||||
698,810 | 574,382 | |||||||||||||||||||||
Deferred origination costs (fees), net | 146 | (28 | ) | |||||||||||||||||||
698,956 | 574,354 | |||||||||||||||||||||
Less allowance for loan losses | 3,121 | 3,588 | ||||||||||||||||||||
Loans-net | $ | 695,835 | 570,766 | |||||||||||||||||||
Loans acquired from the mergers with First Capital and Eaton National are recorded at fair value with no carryover of the acquired entity's previously established allowance for loan losses. The excess of expected cash flows over the estimated fair value of acquired loans is recognized as interest income over the remaining contractual lives of the loans using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then-remaining contractual lives of the loans. Management estimated the cash flows expected to be collected at acquisition using a third-party risk model, which incorporated the estimate of current key assumptions, such as default rates, severity, and prepayment speeds. | ||||||||||||||||||||||
Impaired loans acquired are accounted for under FASB ASC 310-30. Factors considered in evaluating whether an acquired loan was impaired include delinquency status and history, updated borrower credit status, collateral information, and updated loan-to-value information. The difference between contractually required payments at the time of acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. The interest component of the cash flows expected to be collected is referred to as the accretable yield and is recognized as interest income over the remaining contractual life of the loan using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in a reclassification from the nonaccretable difference to the accretable yield. | ||||||||||||||||||||||
The following table provides certain information at the acquisition date on loans acquired from Eaton National, not including loans considered to be impaired (in thousands): | ||||||||||||||||||||||
Contractually required principal at acquisition | $ | 102,483 | ||||||||||||||||||||
Less fair value adjustment | 1,347 | |||||||||||||||||||||
Fair value of acquired loans | $ | 101,136 | ||||||||||||||||||||
Contractual cash flows not expected to be collected | $ | 1,702 | ||||||||||||||||||||
The following table provides details on acquired impaired loans obtained through the merger with Eaton National that are accounted for in accordance with FASB ASC 310-30 (in thousands): | ||||||||||||||||||||||
Contractually required principal at acquisition | $ | 23,414 | ||||||||||||||||||||
Contractual cash flows not expected to be collected (nonaccretable difference) | (6,088 | ) | ||||||||||||||||||||
Expected cash flows at acquisition | 17,326 | |||||||||||||||||||||
Interest component of expected cash flows (accretable discount) | (2,163 | ) | ||||||||||||||||||||
Fair value of acquired impaired loans | $ | 15,163 | ||||||||||||||||||||
Non-accrual, past-due, and accruing restructured loans at December 31 were as follows (in thousands): | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||||
Commercial and industrial | $ | — | 144 | |||||||||||||||||||
Commercial, secured by real estate | 4,277 | 1,418 | ||||||||||||||||||||
Agricultural | 70 | — | ||||||||||||||||||||
Residential real estate | 1,252 | 1,399 | ||||||||||||||||||||
Total non-accrual loans | 5,599 | 2,961 | ||||||||||||||||||||
Past-due 90 days or more and still accruing | 203 | 250 | ||||||||||||||||||||
Total non-accrual and past-due 90 days or more and still accruing | 5,802 | 3,211 | ||||||||||||||||||||
Accruing restructured loans | 14,269 | 15,151 | ||||||||||||||||||||
Total | $ | 20,071 | 18,362 | |||||||||||||||||||
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans | 0.83 | % | 0.56 | % | ||||||||||||||||||
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans | 2.87 | % | 3.2 | % | ||||||||||||||||||
Interest income that would have been recorded during 2014 and 2013 if loans on non-accrual status at December 31, 2014 and 2013 had been current and in accordance with their original terms was approximately $665,000 and $229,000, respectively. | ||||||||||||||||||||||
The Company is not committed to lend additional funds to debtors whose loans have been modified to provide a reduction or deferral of principal or interest because of deterioration in the financial position of the borrower. | ||||||||||||||||||||||
The allowance for loan losses and recorded investment in loans for the years ended December 31 were as follows (in thousands): | ||||||||||||||||||||||
Commercial | Commercial, | Residential | Consumer | Agricultural | Other | Total | ||||||||||||||||
& Industrial | Secured by | Real Estate | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Provision charged to expenses | 173 | (20 | ) | 712 | 18 | 11 | 36 | 930 | ||||||||||||||
Losses charged off | (261 | ) | (573 | ) | (652 | ) | (129 | ) | — | (79 | ) | (1,694 | ) | |||||||||
Recoveries | 42 | 63 | 40 | 108 | — | 44 | 297 | |||||||||||||||
Balance, end of year | $ | 129 | 1,990 | 926 | 63 | 11 | 2 | 3,121 | ||||||||||||||
Individually evaluated for impairment | $ | 10 | 415 | 89 | — | — | — | 514 | ||||||||||||||
Collectively evaluated for impairment | 119 | 1,273 | 836 | 63 | 11 | 2 | 2,304 | |||||||||||||||
Acquired credit impaired loans | — | 302 | 1 | — | — | — | 303 | |||||||||||||||
Balance, end of year | $ | 129 | 1,990 | 926 | 63 | 11 | 2 | 3,121 | ||||||||||||||
Loans: | ||||||||||||||||||||||
Individually evaluated for impairment | $ | 401 | 13,022 | 1,701 | 55 | — | — | 15,179 | ||||||||||||||
Collectively evaluated for impairment | 33,941 | 352,774 | 249,374 | 17,954 | 11,371 | 167 | 665,581 | |||||||||||||||
Acquired credit impaired loans | 1,092 | 12,984 | 3,425 | 81 | 101 | 513 | 18,196 | |||||||||||||||
Balance, end of year | $ | 35,434 | 378,780 | 254,500 | 18,090 | 11,472 | 680 | 698,956 | ||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
Provision charged to expenses | (30 | ) | 256 | 327 | 12 | — | 23 | 588 | ||||||||||||||
Losses charged off | (119 | ) | (58 | ) | (244 | ) | (181 | ) | — | (67 | ) | (669 | ) | |||||||||
Recoveries | 4 | 26 | 31 | 127 | — | 44 | 232 | |||||||||||||||
Balance, end of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Individually evaluated for impairment | $ | 2 | 760 | 270 | — | — | — | 1,032 | ||||||||||||||
Collectively evaluated for impairment | 173 | 1,760 | 556 | 66 | — | 1 | 2,556 | |||||||||||||||
Acquired credit impaired loans | — | — | — | — | — | — | — | |||||||||||||||
Balance, end of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Loans: | ||||||||||||||||||||||
Individually evaluated for impairment | $ | 165 | 14,522 | 2,132 | 27 | — | — | 16,846 | ||||||||||||||
Collectively evaluated for impairment | 28,809 | 295,028 | 212,378 | 12,703 | 2,472 | 91 | 551,481 | |||||||||||||||
Acquired credit impaired loans | 332 | 4,363 | 1,332 | — | — | — | 6,027 | |||||||||||||||
Balance, end of year | $ | 29,306 | 313,913 | 215,842 | 12,730 | 2,472 | 91 | 574,354 | ||||||||||||||
Commercial | Commercial, | Residential | Consumer | Agricultural | Other | Total | ||||||||||||||||
& Industrial | Secured by | Real Estate | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 162 | 1,941 | 656 | 166 | — | 6 | 2,931 | ||||||||||||||
Change in classification | 18 | (18 | ) | — | — | — | — | — | ||||||||||||||
Provision charged to expenses | 299 | 536 | 535 | (47 | ) | — | 28 | 1,351 | ||||||||||||||
Losses charged off | (159 | ) | (234 | ) | (486 | ) | (134 | ) | — | (85 | ) | (1,098 | ) | |||||||||
Recoveries | — | 71 | 7 | 123 | — | 52 | 253 | |||||||||||||||
Balance, end of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
Individually evaluated for impairment | $ | 159 | 607 | 138 | — | — | — | 904 | ||||||||||||||
Collectively evaluated for impairment | 161 | 1,689 | 574 | 108 | — | 1 | 2,533 | |||||||||||||||
Balance, end of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
The risk characteristics of LCNB's material loan portfolio segments are as follows: | ||||||||||||||||||||||
Commercial and Industrial Loans. LCNB’s commercial and industrial loan portfolio consists of loans for various purposes, including loans to fund working capital requirements (such as inventory and receivables financing) and purchases of machinery and equipment. LCNB offers a variety of commercial and industrial loan arrangements, including term loans, balloon loans, and lines of credit. Most commercial and industrial loans have a variable rate, with adjustments occurring monthly, annually, every three years, or every five years. Adjustments are generally based on a publicly available index rate plus a margin. The margin varies based on the terms and collateral securing the loan. Commercial and industrial loans are offered to businesses and professionals for short and medium terms on both a collateralized and uncollateralized basis. Commercial and industrial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of the business. Collateral, when obtained, may include liens on furniture, fixtures, equipment, inventory, receivables, or other assets. As a result, such loans involve complexities, variables, and risks that require thorough underwriting and more robust servicing than other types of loans. | ||||||||||||||||||||||
Commercial, Secured by Real Estate Loans. Commercial real estate loans include loans secured by a variety of commercial, retail, and office buildings, religious facilities, multifamily (more than two-family) residential properties, construction and land development loans, and other land loans. Commercial real estate loan products generally amortize over five to twenty-five years and are payable in monthly principal and interest installments. Some have balloon payments due within one to ten years after the origination date. Many have adjustable interest rates with adjustment periods ranging from one to ten years, some of which are subject to established “floor” interest rates. | ||||||||||||||||||||||
Commercial real estate loans are underwritten based on the ability of the property, in the case of income producing property, or the borrower’s business to generate sufficient cash flow to amortize the debt. Secondary emphasis is placed upon global debt service, collateral value, financial strength of any guarantors, and other factors. Commercial real estate loans are generally originated with a 75% maximum loan to appraised value ratio. | ||||||||||||||||||||||
Residential Real Estate Loans. Residential real estate loans include loans secured by first or second mortgage liens on one to two-family residential property. Home equity lines of credit and mortgage loans secured by owner-occupied agricultural property are included in this category. First and second mortgage loans are generally amortized over five to thirty years with monthly principal and interest payments. Home equity lines of credit generally have a five year draw period with interest only payments followed by a repayment period with monthly payments based on the amount outstanding. LCNB offers both fixed and adjustable rate mortgage loans. Adjustable rate loans are available with adjustment periods ranging between one to ten years and adjust according to an established index plus a margin, subject to certain floor and ceiling rates. Home equity lines of credit have a variable rate based on the Wall Street Journal prime rate plus a margin. | ||||||||||||||||||||||
LCNB does not originate reverse mortgage loans or residential real estate loans generally considered to be “subprime.” | ||||||||||||||||||||||
Residential real estate loans are underwritten primarily based on the borrower’s ability to repay, prior credit history, and the value of the collateral. LCNB requires private mortgage insurance for first mortgage loans that have a loan to appraised value ratio of greater than 80%. | ||||||||||||||||||||||
Consumer Loans. LCNB’s portfolio of consumer loans generally includes secured and unsecured loans to individuals for household, family and other personal expenditures. Secured loans include loans to fund the purchase of automobiles, recreational vehicles, boats, and similar acquisitions. Consumer loans made by LCNB generally have fixed rates and terms ranging up to 72 months, depending upon the nature of the collateral, size of the loan, and other relevant factors. | ||||||||||||||||||||||
Consumer loans generally have higher interest rates, but pose additional risks of collectibility and loss when compared to certain other types of loans. Collateral, if present, is generally subject to damage, wear, and depreciation. The borrower’s ability to repay is of primary importance in the underwriting of consumer loans. | ||||||||||||||||||||||
Agricultural Loans. LCNB’s portfolio of agricultural loans includes loans for financing agricultural production or for financing the purchase of equipment used in the production of agricultural products. LCNB’s agricultural loans are generally secured by farm machinery, livestock, crops, vehicles, or other agri-related collateral. | ||||||||||||||||||||||
The Company uses a risk-rating system to quantify loan quality. A loan is assigned to a risk category based on relevant information about the ability of the borrower to service the debt including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The categories used are: | ||||||||||||||||||||||
• | Pass – loans categorized in this category are higher quality loans that do not fit any of the other categories described below. | |||||||||||||||||||||
• | Other Assets Especially Mentioned (OAEM) - loans in this category are currently protected but are potentially weak. These loans constitute a risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an undue risk in light of the circumstances surrounding a specific asset. | |||||||||||||||||||||
• | Substandard – loans in this category are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Company will sustain some loss if the deficiencies are not corrected. | |||||||||||||||||||||
• | Doubtful – loans classified in this category have all the weaknesses inherent in loans classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. | |||||||||||||||||||||
An analysis of the Company’s loan portfolio by credit quality indicators at December 31 is as follows (in thousands): | ||||||||||||||||||||||
Pass | OAEM | Substandard | Doubtful | Total | ||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Commercial & industrial | $ | 34,322 | — | 1,112 | — | 35,434 | ||||||||||||||||
Commercial, secured by real estate | 353,957 | 6,421 | 18,402 | — | 378,780 | |||||||||||||||||
Residential real estate | 246,335 | 920 | 7,245 | — | 254,500 | |||||||||||||||||
Consumer | 17,979 | — | 111 | — | 18,090 | |||||||||||||||||
Agricultural | 11,273 | — | 199 | — | 11,472 | |||||||||||||||||
Other | 680 | — | — | — | 680 | |||||||||||||||||
Total | $ | 664,546 | 7,341 | 27,069 | — | 698,956 | ||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Commercial & industrial | $ | 27,563 | 44 | 1,699 | — | 29,306 | ||||||||||||||||
Commercial, secured by real estate | 295,189 | 3,967 | 14,757 | — | 313,913 | |||||||||||||||||
Residential real estate | 208,881 | 1,136 | 5,825 | — | 215,842 | |||||||||||||||||
Consumer | 12,681 | — | 49 | — | 12,730 | |||||||||||||||||
Agricultural | 2,472 | — | — | — | 2,472 | |||||||||||||||||
Other | 91 | — | — | — | 91 | |||||||||||||||||
Total | $ | 546,877 | 5,147 | 22,330 | — | 574,354 | ||||||||||||||||
The Company evaluates the loan risk grading system definitions and allowance for loan loss methodology on an ongoing basis. No significant changes were made to either during the past year. | ||||||||||||||||||||||
A loan portfolio aging analysis at December 31 is as follows (in thousands): | ||||||||||||||||||||||
30-59 Days | 60-89 Days | Greater Than | Total | Current | Total Loans | Total Loans Greater Than | ||||||||||||||||
Past Due | Past Due | 90 Days | Past Due | Receivable | 90 Days and | |||||||||||||||||
Accruing | ||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Commercial & industrial | $ | 4 | — | — | 4 | 35,430 | 35,434 | — | ||||||||||||||
Commercial, secured by real estate | 1,000 | 83 | 3,179 | 4,262 | 374,518 | 378,780 | 9 | |||||||||||||||
Residential real estate | 648 | 297 | 1,289 | 2,234 | 252,266 | 254,500 | 177 | |||||||||||||||
Consumer | 59 | 28 | 17 | 104 | 17,986 | 18,090 | 17 | |||||||||||||||
Agricultural | 73 | 70 | — | 143 | 11,329 | 11,472 | — | |||||||||||||||
Other | 106 | — | — | 106 | 574 | 680 | — | |||||||||||||||
Total | $ | 1,890 | 478 | 4,485 | 6,853 | 692,103 | 698,956 | 203 | ||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Commercial & industrial | $ | 277 | — | 144 | 421 | 28,885 | 29,306 | — | ||||||||||||||
Commercial, secured by real estate | 951 | 582 | 1,174 | 2,707 | 311,206 | 313,913 | — | |||||||||||||||
Residential real estate | 1,131 | 299 | 1,604 | 3,034 | 212,808 | 215,842 | 236 | |||||||||||||||
Consumer | 38 | 35 | 13 | 86 | 12,644 | 12,730 | 14 | |||||||||||||||
Agricultural | — | — | — | — | 2,472 | 2,472 | — | |||||||||||||||
Other | 91 | — | — | 91 | — | 91 | — | |||||||||||||||
Total | $ | 2,488 | 916 | 2,935 | 6,339 | 568,015 | 574,354 | 250 | ||||||||||||||
Impaired loans for the years ended December 31 were as follows (in thousands): | ||||||||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 1,092 | 2,077 | — | 1,823 | 161 | ||||||||||||||||
Commercial, secured by real estate | 21,987 | 26,715 | — | 23,360 | 1,373 | |||||||||||||||||
Residential real estate | 4,074 | 5,549 | — | 4,645 | 379 | |||||||||||||||||
Consumer | 117 | 178 | — | 179 | 14 | |||||||||||||||||
Agricultural | 101 | 619 | — | 121 | 20 | |||||||||||||||||
Other | 513 | 744 | — | 550 | 43 | |||||||||||||||||
Total | $ | 27,884 | 35,882 | — | 30,678 | 1,990 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 401 | 406 | 10 | 319 | 19 | ||||||||||||||||
Commercial, secured by real estate | 4,019 | 4,538 | 717 | 4,108 | 117 | |||||||||||||||||
Residential real estate | 1,052 | 1,265 | 90 | 1,026 | 44 | |||||||||||||||||
Consumer | 19 | 20 | — | 18 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||
Total | $ | 5,491 | 6,229 | 817 | 5,471 | 182 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 1,493 | 2,483 | 10 | 2,142 | 180 | ||||||||||||||||
Commercial, secured by real estate | 26,006 | 31,253 | 717 | 27,468 | 1,490 | |||||||||||||||||
Residential real estate | 5,126 | 6,814 | 90 | 5,671 | 423 | |||||||||||||||||
Consumer | 136 | 198 | — | 197 | 16 | |||||||||||||||||
Agricultural | 101 | 619 | — | 121 | 20 | |||||||||||||||||
Other | 513 | 744 | — | 550 | 43 | |||||||||||||||||
Total | $ | 33,375 | 42,111 | 817 | 36,149 | 2,172 | ||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 332 | 531 | — | 700 | 35 | ||||||||||||||||
Commercial, secured by real estate | 10,883 | 12,317 | — | 11,612 | 748 | |||||||||||||||||
Residential real estate | 2,096 | 2,967 | — | 2,345 | 182 | |||||||||||||||||
Consumer | — | — | — | 7 | — | |||||||||||||||||
Agricultural | — | — | — | 13 | 6 | |||||||||||||||||
Total | $ | 13,311 | 15,815 | — | 14,677 | 971 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 165 | 270 | 2 | 186 | 2 | ||||||||||||||||
Commercial, secured by real estate | 7,725 | 7,725 | 760 | 7,368 | 252 | |||||||||||||||||
Residential real estate | 1,645 | 1,663 | 270 | 1,123 | 44 | |||||||||||||||||
Consumer | 27 | 27 | — | 17 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 9,562 | 9,685 | 1,032 | 8,694 | 300 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 497 | 801 | 2 | 886 | 37 | ||||||||||||||||
Commercial, secured by real estate | 18,608 | 20,042 | 760 | 18,980 | 1,000 | |||||||||||||||||
Residential real estate | 3,741 | 4,630 | 270 | 3,468 | 226 | |||||||||||||||||
Consumer | 27 | 27 | — | 24 | 2 | |||||||||||||||||
Agricultural | — | — | — | 13 | 6 | |||||||||||||||||
Total | $ | 22,873 | 25,500 | 1,032 | 23,371 | 1,271 | ||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
31-Dec-12 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | — | — | — | 975 | 43 | ||||||||||||||||
Commercial, secured by real estate | 9,541 | 9,936 | — | 9,310 | 350 | |||||||||||||||||
Residential real estate | 417 | 417 | — | 397 | 5 | |||||||||||||||||
Consumer | 20 | 20 | — | 23 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 9,978 | 10,373 | — | 10,705 | 400 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 264 | 822 | 159 | 374 | — | ||||||||||||||||
Commercial, secured by real estate | 4,258 | 4,360 | 660 | 4,765 | 171 | |||||||||||||||||
Residential real estate | 658 | 853 | 85 | 707 | 2 | |||||||||||||||||
Consumer | — | — | — | 4 | — | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 5,180 | 6,035 | 904 | 5,850 | 173 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 264 | 822 | 159 | 1,349 | 43 | ||||||||||||||||
Commercial, secured by real estate | 13,799 | 14,296 | 660 | 14,075 | 521 | |||||||||||||||||
Residential real estate | 1,075 | 1,270 | 85 | 1,104 | 7 | |||||||||||||||||
Consumer | 20 | 20 | — | 27 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 15,158 | 16,408 | 904 | 16,555 | 573 | ||||||||||||||||
Of the $2,172,000, $1,271,000, and $573,000 of interest income recognized on impaired loans during 2014, 2013, and 2012, respectively, $8,000 was recognized on a cash basis during 2014 and none was recognized on a cash basis during 2013 and 2012. The Company continued to accrue interest on certain loans classified as impaired during 2014, 2013, and 2012 because they were restructured or considered well secured and in the process of collection. | ||||||||||||||||||||||
Loan modifications that were classified as troubled debt restructurings during the years ended December 31 were as follows (dollars in thousands): | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Number | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | Number | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | |||||||||||||||||
of Loans | of Loans | |||||||||||||||||||||
Commercial and industrial | 8 | $ | 658 | $ | 340 | 1 | $ | 22 | $ | 22 | ||||||||||||
Commercial, secured by real estate | 2 | 896 | 1,214 | 3 | 1,594 | 1,594 | ||||||||||||||||
Residential real estate | 2 | 82 | 82 | 6 | 508 | 508 | ||||||||||||||||
Consumer | 3 | 40 | 40 | 2 | 27 | 27 | ||||||||||||||||
15 | $ | 1,676 | $ | 1,676 | 12 | $ | 2,151 | $ | 2,151 | |||||||||||||
The pre-modification and post-modification recorded balances for the commercial and industrial and commercial, secured by real estate categories in 2014 changed because a borrower had multiple loans classified as commercial and industrial and a loan classified as commercial, secured by real estate, which were all modified into a loan classified as commercial, secured by real estate. | ||||||||||||||||||||||
Each restructured loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s ability to pay the debt as modified. Modifications may include interest only payments for a period of time, temporary or permanent reduction of the loan’s interest rate, capitalization of delinquent interest, or extensions of the maturity date. | ||||||||||||||||||||||
LCNB is not committed to lend additional funds to borrowers whose loan terms were modified in a troubled debt restructuring. | ||||||||||||||||||||||
A restructured automobile loan with a balance of $13,000 was charged off during the first quarter 2013, which was within twelve months of the loan's modification date. There were no other troubled debt restructurings that subsequently defaulted within twelve months of the restructuring date for the years ended December 31, 2014 and 2013. | ||||||||||||||||||||||
All troubled debt restructurings are considered impaired loans. The allowance for loan loss on such restructured loans is based on the present value of future expected cash flows. | ||||||||||||||||||||||
Approximately $1,329,000 of impaired loans without a valuation allowance and $299,000 of impaired loans with a valuation allowance at December 31, 2014 consisted of loans that were modified during 2014 and were determined to be troubled debt restructurings. Approximately $327,000 of impaired loans, excluding acquired credit impaired loans, without a valuation allowance and $1,141,000 of impaired loans with a valuation allowance at December 31, 2013 consisted of loans that were modified during 2013 and were determined to be troubled debt restructurings. | ||||||||||||||||||||||
Mortgage loans sold to and serviced for the Federal Home Loan Mortgage Corporation and other investors are not included in the accompanying consolidated balance sheets. The unpaid principal balances of those loans at December 31, 2014, 2013 and 2012 were approximately $120,433,000, $90,343,000, and $71,568,000 respectively. | ||||||||||||||||||||||
Mortgage servicing right assets are included in other assets in the consolidated balance sheets. Amortization of mortgage servicing rights is an adjustment to loan servicing income, which is included with other operating income in the consolidated statements of income. Activity in the mortgage servicing rights portfolio during the years ended December 31 was as follows (in thousands): | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Balance, beginning of year | $ | 498 | 475 | 418 | ||||||||||||||||||
Amount capitalized to mortgage servicing rights | 292 | 191 | 283 | |||||||||||||||||||
Amortization of mortgage servicing rights | (199 | ) | (168 | ) | (226 | ) | ||||||||||||||||
Balance, end of year | $ | 591 | 498 | 475 | ||||||||||||||||||
ACQUIRED_CREDIT_IMPAIRED_LOANS
ACQUIRED CREDIT IMPAIRED LOANS | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquired Credit Impaired Loans [Abstract] | ||||||||
ACQUIRED CREDIT IMPAIRED LOANS | ACQUIRED CREDIT IMPAIRED LOANS | |||||||
The following table provides, as of December 31, the major classifications of loans acquired during 2014 and 2013 that are accounted for in accordance with FASB ASC 310-30 (in thousands): | ||||||||
2014 | 2013 | |||||||
Commercial & industrial | $ | 1,092 | 332 | |||||
Commercial, secured by real estate | 12,984 | 4,363 | ||||||
Residential real estate | 3,425 | 1,332 | ||||||
Consumer | 81 | — | ||||||
Agricultural | 101 | — | ||||||
Other loans, including deposit overdrafts | 513 | — | ||||||
18,196 | 6,027 | |||||||
Less allowance for loan losses | 303 | — | ||||||
Loans, net | $ | 17,893 | 6,027 | |||||
The following table provides the outstanding balance and related carrying amount for acquired impaired loans at December 31 (in thousands): | ||||||||
2014 | 2013 | |||||||
Outstanding balance | $ | 26,697 | 8,220 | |||||
Carrying amount | 18,196 | 6,027 | ||||||
Activity during 2014 for the accretable discount related to acquired impaired loans is as follows (in thousands): | ||||||||
2014 | 2013 | |||||||
Accretable discount, beginning of year | $ | 1,107 | — | |||||
Accretable discount acquired during period | 2,163 | 1,389 | ||||||
Reclass from nonaccretable discount to accretable discount | 177 | 157 | ||||||
Less disposals | (249 | ) | (23 | ) | ||||
Less accretion | (524 | ) | (416 | ) | ||||
Accretable discount, end of year | $ | 2,674 | $ | 1,107 | ||||
OTHER_REAL_ESTATE_OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Real Estate [Abstract] | |||||||
OTHER REAL ESTATE OWNED | OTHER REAL ESTATE OWNED | ||||||
Other real estate owned includes property acquired through foreclosure or deed-in-lieu of foreclosure and also includes property deemed to be in-substance foreclosed and are included in other assets in the consolidated balance sheets. Changes in other real estate owned were as follows (in thousands): | |||||||
2014 | 2013 | ||||||
Balance, beginning of year | $ | 1,463 | 2,189 | ||||
Additions | 480 | 133 | |||||
Additions due to merger | 262 | 127 | |||||
Reductions due to sales | (735 | ) | (909 | ) | |||
Reductions due to valuation write downs | (100 | ) | (77 | ) | |||
Balance, end of year | $ | 1,370 | 1,463 | ||||
Other real estate owned at December 31 consisted of (in thousands): | |||||||
2014 | 2013 | ||||||
Commercial real estate | $ | 1,265 | 1,415 | ||||
Residential real estate | 105 | 48 | |||||
$ | 1,370 | 1,463 | |||||
PREMISES_AND_EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Property, Plant and Equipment [Abstract] | |||||||
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT | ||||||
Premises and equipment at December 31 are summarized as follows (in thousands): | |||||||
2014 | 2013 | ||||||
Land | $ | 6,045 | 5,354 | ||||
Buildings | 19,728 | 18,778 | |||||
Equipment | 12,627 | 12,172 | |||||
Construction in progress | 49 | — | |||||
Total | 38,449 | 36,304 | |||||
Less accumulated depreciation | 17,716 | 16,407 | |||||
Premises and equipment, net | $ | 20,733 | 19,897 | ||||
Depreciation charged to expense was, $1,479,000 in 2014, and $1,456,000 in 2013, and $1,256,000 in 2012. |
LEASES
LEASES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases [Abstract] | ||||
LEASES | LEASES | |||
Some of the Bank's branches, telephone equipment, and other equipment are leased under agreements expiring at various dates through 2050. These leases are accounted for as operating leases. The leases generally provide for renewal options and most require periodic changes in rental amounts based on various indices. Minimum annual rentals for each of the years 2015 through 2019 and thereafter for non-cancelable leases having terms in excess of one year are as follows (in thousands): | ||||
2015 | $ | 473 | ||
2016 | 406 | |||
2017 | 285 | |||
2018 | 198 | |||
2019 | 155 | |||
Thereafter | 3,869 | |||
Total | $ | 5,386 | ||
Rental expense for all leased branches and equipment was approximately $537,000 in 2014, and $484,000 in 2013, and $451,000 in 2012. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||
Changes in goodwill during 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Balance, beginning of year | $ | 14,186 | 5,915 | ||||||||||||||||
Additions from acquisitions | 13,452 | 8,271 | |||||||||||||||||
Balance, end of year | $ | 27,638 | 14,186 | ||||||||||||||||
Other intangible assets in the consolidated balance sheets at December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||
Intangible | Amortization | Intangible | Intangible | Amortization | Intangible | ||||||||||||||
Assets | Assets | Assets | Assets | ||||||||||||||||
Core deposit intangibles | $ | 5,040 | 851 | 4,189 | 2,917 | 620 | 2,297 | ||||||||||||
Mortgage servicing rights | 1,418 | 827 | 591 | 1,126 | 628 | 498 | |||||||||||||
Total | $ | 6,458 | 1,678 | 4,780 | 4,043 | 1,248 | 2,795 | ||||||||||||
The estimated aggregate future amortization expense for each of the next five years for intangible assets remaining as of December 31, 2014 is as follows (in thousands): | |||||||||||||||||||
2015 | $ | 747 | |||||||||||||||||
2016 | 721 | ||||||||||||||||||
2017 | 697 | ||||||||||||||||||
2018 | 677 | ||||||||||||||||||
2019 | 661 | ||||||||||||||||||
CERTIFICATES_OF_DEPOSIT
CERTIFICATES OF DEPOSIT | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Time Deposits [Abstract] | ||||
CERTIFICATES OF DEPOSIT | CERTIFICATES OF DEPOSIT | |||
Contractual maturities of time deposits at December 31, 2014 were as follows (in thousands): | ||||
2015 | $ | 102,283 | ||
2016 | 48,294 | |||
2017 | 12,418 | |||
2018 | 17,908 | |||
2019 | 26,887 | |||
Thereafter | 6,345 | |||
$ | 214,135 | |||
The aggregate amount of time deposits in denominations of $250,000 or more at December 31, 2014 was $24,374,000. The aggregate amount of time deposits in denominations of $100,000 or more at December 31, 2013 was $64,772,000. |
BORROWINGS
BORROWINGS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||
BORROWINGS | BORROWINGS | |||||||||||||
Funds borrowed from the FHLB at December 31 are as follows (dollars in thousands): | ||||||||||||||
Current | 2014 | 2013 | ||||||||||||
Interest | ||||||||||||||
Rate | ||||||||||||||
Fixed Rate Advances, due at maturity: | ||||||||||||||
Advance due January 2015 | 2 | % | $ | 5,000 | 5,000 | |||||||||
Advance due March 2017 | 5.25 | % | 5,000 | 5,000 | ||||||||||
Fixed Rate Advances, with monthly principal and interest payments: | ||||||||||||||
Advance due March 2014 | 2.45 | % | — | 265 | ||||||||||
Advance due March 2019 | 2.82 | % | 1,357 | 1,837 | ||||||||||
$ | 11,357 | 12,102 | ||||||||||||
All advances from the FHLB are secured by a blanket pledge of the Company’s 1-4 family first lien mortgage loans in the amount of approximately $212 million and $183 million at December 31, 2014 and 2013, respectively. Additionally, the Company was required to hold minimum levels of FHLB stock, based on the outstanding borrowings. Total remaining borrowing capacity, including short-term borrowing arrangements, at December 31, 2014 was approximately $100.8 million. One of the factors limiting remaining borrowing capacity is ownership of FHLB stock. The Company could increase its remaining borrowing capacity by purchasing additional FHLB stock. | ||||||||||||||
Short-term borrowings at December 31 are as follows (dollars in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Amount | Rate | Amount | Rate | |||||||||||
Line of credit | $ | 5,021 | 0.75 | % | $ | — | — | % | ||||||
Repurchase agreements | 11,624 | 0.1 | % | 8,655 | 0.1 | % | ||||||||
$ | 16,645 | 0.3 | % | $ | 8,655 | 0.1 | % | |||||||
At December 31, 2014, the Company had short-term borrowing arrangements with three financial institutions and the Federal Home Loan Bank of Cincinnati. The first arrangement provides that the Company can borrow up to $7 million in federal funds at the interest rate in effect at the time of the borrowing. The second arrangement provides that the Company can borrow up to $10 million in federal funds at the interest rate in effect at the time of the borrowing. The third arrangement is a short-term line of credit for a maximum amount of $20 million at an interest rate equal to the lending institution’s federal funds rate plus a spread of 50 basis points. | ||||||||||||||
Under the terms of the Cash Management Advance program with the Federal Home Loan Bank of Cincinnati, the Company can borrow up to $46.5 million in short-term advances, subject to total remaining borrowing capacity limitations. The Company has the option of selecting a variable rate of interest for up to 90 days or a fixed rate of interest for up to 30 days. The interest rate on the Cash Management Advance program is the published rate in effect at the time of the advance. This agreement expires on August 28, 2015. | ||||||||||||||
Repurchase agreements are an option customers may use in managing their cash positions. The repurchase agreements mature the next business day after issuance. They are secured by U.S. Treasury, U.S. Agency, or government guaranteed mortgage-backed securities and such collateral securities are held by the Federal Reserve Bank. The maximum amount of outstanding agreements at any month-end during 2014 and 2013 totaled $12,927,000 and $15,165,000, respectively. The average balance during 2014 and 2013 was $11,367,000 and $11,376,000, respectively. | ||||||||||||||
As of December 31, 2014 and 2013, approximately $1.2 million and $0.7 million, respectively, of the repurchase agreements outstanding were held by a company owned by a member of the Company’s Board of Directors. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Tax Disclosure [Abstract] | ||||||||||
INCOME TAXES | INCOME TAXES | |||||||||
The provision for federal income taxes consists of (in thousands): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Income taxes currently payable | $ | 3,194 | 2,750 | 2,764 | ||||||
Deferred income tax provision (benefit) | 192 | 192 | 31 | |||||||
Provision for income taxes | $ | 3,386 | 2,942 | 2,795 | ||||||
A reconciliation between the statutory income tax and the Company's effective tax rate follows: | ||||||||||
2014 | 2013 | 2012 | ||||||||
Statutory tax rate | 34 | % | 34 | % | 34 | % | ||||
Increase (decrease) resulting from - | ||||||||||
Tax exempt interest | (6.8 | )% | (7.2 | )% | (7.2 | )% | ||||
Tax exempt income on bank owned life insurance | (1.7 | )% | (2.0 | )% | (1.8 | )% | ||||
Other – net | — | % | 0.3 | % | 0.3 | % | ||||
Effective tax rate | 25.5 | % | 25.1 | % | 25.3 | % | ||||
Deferred tax assets and liabilities at December 31 consist of the following (in thousands): | ||||||||||
2014 | 2013 | |||||||||
Deferred tax assets: | ||||||||||
Allowance for loan losses | $ | 1,061 | 1,148 | |||||||
Net unrealized losses on investment securities available-for-sale | 470 | 846 | ||||||||
Fair value adjustment on loans acquired from merger with First Capital | 847 | 1,184 | ||||||||
Write-down of other real estate owned | 196 | 196 | ||||||||
Pension and deferred compensation | 849 | 1,304 | ||||||||
Other | 274 | 107 | ||||||||
3,697 | 4,785 | |||||||||
Deferred tax liabilities: | ||||||||||
Depreciation of premises and equipment | (1,280 | ) | (1,408 | ) | ||||||
Amortization of intangibles | (840 | ) | (950 | ) | ||||||
Deferred loan fees | (3 | ) | — | |||||||
FHLB stock dividends | (349 | ) | (345 | ) | ||||||
Fair value adjustment on securities acquired from merger with First Capital | (70 | ) | (143 | ) | ||||||
(2,542 | ) | (2,846 | ) | |||||||
Net deferred tax assets (liabilities) | $ | 1,155 | $ | 1,939 | ||||||
As of December 31, 2014 and 2013 there were no unrecognized tax benefits and the Company does not anticipate the total amount of unrecognized tax benefits will significantly change within the next twelve months. There were no amounts recognized for interest and penalties in the consolidated statements of income for the three-year period ended December 31, 2014. | ||||||||||
The Company is no longer subject to examination by federal tax authorities for years before 2011. |
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES | ||||||
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. They involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contract amount of those instruments. | |||||||
The Company offers the Bounce Protection product, a customer deposit overdraft program, which is offered as a service and does not constitute a contract between the customer and LCNB. | |||||||
The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. | |||||||
Financial instruments whose contract amounts represent off-balance-sheet credit risk at December 31 were as follows (in thousands): | |||||||
2014 | 2013 | ||||||
Commitments to extend credit: | |||||||
Commercial loans | $ | 5,152 | 9,316 | ||||
Other loans: | |||||||
Fixed rate | 877 | 852 | |||||
Adjustable rate | 2,011 | 1,653 | |||||
Unused lines of credit: | |||||||
Fixed rate | 6,496 | 3,404 | |||||
Adjustable rate | 67,981 | 60,236 | |||||
Unused overdraft protection amounts on demand and NOW accounts | 10,206 | 9,494 | |||||
Standby letters of credit | 563 | 365 | |||||
$ | 93,286 | 85,320 | |||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract or agreement. Unused lines of credit include amounts not drawn on line of credit loans. Commitments to extend credit and unused lines of credit generally have fixed expiration dates or other termination clauses. | |||||||
Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees generally are fully secured and have varying maturities. | |||||||
The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, is based on management’s credit evaluation of the borrower. Collateral held varies, but may include accounts receivable; inventory; property, plant and equipment; residential realty; and income-producing commercial properties. | |||||||
Capital expenditures include the construction or acquisition of new office buildings, improvements to LCNB's offices, | |||||||
purchases of furniture and equipment, and additions or improvements to LCNB's information technology system. | |||||||
Commitments outstanding for capital expenditures as of December 31, 2014 totaled approximately $112,000. | |||||||
The Company and its subsidiaries are parties to various claims and proceedings arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such proceedings and claims will not be material to the consolidated financial position or results of operations. |
REGULATORY_MATTERS
REGULATORY MATTERS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Banking and Thrift [Abstract] | |||||||||||||
REGULATORY MATTERS | REGULATORY MATTERS | ||||||||||||
The Federal Reserve Act requires depository institutions to maintain cash reserves with the Federal Reserve Bank. In 2014 and 2013, the Bank maintained average reserve balances of $11,766,000 and $9,128,000, respectively. The reserve balances at December 31, 2014 and 2013 were $18,638,000 and $11,730,000, respectively. | |||||||||||||
The principal source of income and funds for LCNB Corp. is dividends paid by the Bank. The payment of dividends is subject to restriction by regulatory authorities. For 2014, the restrictions generally limit dividends to the aggregate of net income for the year 2014 plus the net earnings retained for 2013 and 2012. In addition, dividend payments may not reduce capital levels below minimum regulatory guidelines. At December 31, 2014, approximately $4,073,000 of the Bank’s earnings retained was available for dividends in 2015 under this guideline. Dividends in excess of these limitations would require the prior approval of the Comptroller of the Currency. | |||||||||||||
The Company (consolidated) and the Bank must meet certain minimum capital requirements set by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company's and Bank's financial statements. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors. For various regulatory purposes, institutions are classified into categories based upon capital adequacy. | |||||||||||||
Minimum capital requirements and capital levels needed to be considered well-capitalized at December 31, 2014 and 2013 are: | |||||||||||||
Minimum | To Be Considered | ||||||||||||
Requirement | Well-Capitalized | ||||||||||||
Ratio of tier 1 capital to risk-weighted assets | 4.00% | 6.00% | |||||||||||
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 8.00% | 10.00% | |||||||||||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 3.00% | 5.00% | |||||||||||
As of the most recent notification from their regulators, the Company and Bank were categorized as "well-capitalized" under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since the last notification that would change the Bank's category. | |||||||||||||
A summary of the regulatory capital of the Consolidated Company and Bank at December 31 follows (dollars in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
Consolidated | Bank | Consolidated | Bank | ||||||||||
Company | Company | ||||||||||||
Regulatory Capital: | |||||||||||||
Shareholders' equity | $ | 125,695 | 119,350 | 118,873 | 90,438 | ||||||||
Goodwill and other intangible assets | (31,886 | ) | (31,886 | ) | (16,532 | ) | (16,532 | ) | |||||
Accumulated other comprehensive (income) loss | (785 | ) | (583 | ) | 1,722 | 1,856 | |||||||
Tier 1 risk-based capital | 93,024 | 86,881 | 104,063 | 75,762 | |||||||||
Eligible allowance for loan losses | 3,121 | 3,121 | 3,588 | 3,588 | |||||||||
Total risk-based capital | $ | 96,145 | 90,002 | 107,651 | 79,350 | ||||||||
Capital Ratios: | |||||||||||||
Tier 1 capital to risk-weighted assets | 13.92 | % | 13.03 | % | 18.03 | % | 13.18 | % | |||||
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 14.38 | % | 13.5 | % | 18.65 | % | 13.81 | % | |||||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 8.53 | % | 7.98 | % | 11.1 | % | 8.1 | % | |||||
An underwritten public offering of common stock was completed during November 2013. LCNB issued 1,642,857 shares of stock, resulting in $26.9 million of net proceeds. The net proceeds were used to fund the acquisition of Eaton National Bank in January 2014 and the remaining net proceeds were used for general corporate purposes. | |||||||||||||
LCNB Corp. filed a Registration Statement on Form S-3 with the SEC on July 27, 2011 to register 400,000 shares for use in its Amended and Restated Dividend Reinvestment and Stock Purchase Plan (the “Amended Plan”). Formerly LCNB purchased the shares needed for its Dividend and Stock Purchase Plan in the secondary market. Under the Amended Plan, LCNB has the option of purchasing shares in the secondary market, using treasury shares, or issuing new shares. | |||||||||||||
Two warrants for the purchase of an aggregate total of 217,063 common shares of LCNB stock at an exercise price of $9.26 per share were outstanding at December 31, 2014. The warrants carry a ten year term and were 100% vested at the date of grant, which was January 9, 2009. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||||||||||||
Changes in accumulated other comprehensive income (loss) for 2014 and 2013 are as follows (in thousands): | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Unrealized Gains and Losses on Available-for-Sale Securities | Changes in Pension Plan Assets and Benefit Obligations | Total | Unrealized Gains and Losses on Available-for-Sale Securities | Changes in Pension Plan Assets and Benefit Obligations | Total | ||||||||||||||
Balance at beginning of year | $ | (1,641 | ) | (81 | ) | (1,722 | ) | 4,875 | (154 | ) | 4,721 | ||||||||
Before reclassifications | 2,865 | (260 | ) | 2,605 | (5,706 | ) | 73 | (5,633 | ) | ||||||||||
Reclassifications | (98 | ) | — | (98 | ) | (810 | ) | — | (810 | ) | |||||||||
Balance at end of year | $ | 1,126 | (341 | ) | 785 | (1,641 | ) | (81 | ) | (1,722 | ) | ||||||||
Reclassifications out of accumulated other comprehensive income (loss) during 2014 and 2013 and the affected line items in the consolidated statements of income are as follows (in thousands): | |||||||||||||||||||
2014 | 2013 | Affected Line Item in the Consolidated Statements of Income | |||||||||||||||||
Realized gain on sales of securities | $ | 149 | 1,060 | Net gain on sale of securities | |||||||||||||||
Adjustment for change in unrealized gain between sale date and previous quarter-end | — | 168 | Not applicable | ||||||||||||||||
149 | 1,228 | ||||||||||||||||||
Less provision for income taxes | 51 | 418 | Provision for income taxes | ||||||||||||||||
Reclassification adjustment, net of taxes | $ | 98 | 810 | ||||||||||||||||
RETIREMENT_PLANS
RETIREMENT PLANS | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||
RETIREMENT PLANS | RETIREMENT PLANS | |||||||||
Prior to January 1, 2009, the Company had a single-employer qualified noncontributory defined benefit retirement plan that covered substantially all regular full-time employees. Effective January 1, 2009, the Company redesigned the plan and merged it into a multiple-employer plan, which is accounted for as a multi-employer plan because assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. Employees hired on or after January 1, 2009 are not eligible to participate in this plan. | ||||||||||
Effective February 1, 2009, the Company amended the plan to reduce benefits for those whose age plus vesting service equaled less than 65 at that date. Also effective February 1, 2009, an enhanced 401(k) plan was made available to those hired on or after January 1, 2009 and to those who received benefit reductions from the amendments to the noncontributory defined benefit retirement plan. Employees hired on or after January 1, 2009 receive a 50% employer match on their contributions into the 401(k) plan, up to a maximum company contribution of 3% of each individual employee’s annual compensation. Employees who received a benefit reduction under the retirement plan amendments receive an automatic contribution of 5% or 7% of annual compensation, depending on the sum of an employee’s age and vesting service, into the 401(k) plan, regardless of the contributions made by the employees. This contribution is made annually and these employees will not receive any employer matches to their 401(k) contributions. | ||||||||||
Certain information pertaining to the qualified noncontributory defined benefit retirement plan is as follows: | ||||||||||
Legal name | Pentegra Defined Benefit Plan for Financial Institutions | |||||||||
Plan's employer identification number | 13-5645888 | |||||||||
Plan number | 333 | |||||||||
The plan is at least 80% funded as of July 1, 2014 and 2013. A funding improvement or rehabilitation plan has not been implemented, nor has a surcharge been paid to the plan. | ||||||||||
Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and 401(k) plan charged to salaries and employee benefits in the consolidated statements of income for the years ended December 31 were as follows (in thousands): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Qualified noncontributory defined benefit retirement plan | $ | 967 | 486 | 355 | ||||||
401(k) plan | 326 | 294 | 275 | |||||||
The Company expects to contribute $158,000 to the qualified noncontributory defined benefit retirement plan in 2015. The Company expects to contribute $335,000 to the 401(k) plan in 2015. The Company’s contributions to the qualified noncontributory defined benefit retirement plan do not represent more than 5% of total contributions to the plan. | ||||||||||
Citizens National Bank had a qualified noncontributory defined benefit pension plan which covered employees hired before May 1, 2005. The Company assumed this plan at the time of the merger and recorded a $31,000 liability, representing the funded status of the plan. | ||||||||||
The Bank has a benefit plan which permits eligible officers to defer a portion of their compensation. The deferred compensation balance, which accrues interest at 8% annually, is distributable in cash after retirement or termination of employment. The amount of such deferred compensation liability at December 31, 2014 and 2013 was $3,012,000 and $2,732,000, respectively. | ||||||||||
The Bank also has supplemental income plans which provide certain employees an amount based on a percentage of average compensation, payable in accordance with individually defined schedules upon retirement. The projected benefit obligation included in other liabilities for the supplemental income plans at December 31, 2014 and 2013 is $1,106,000 and $1,040,000, respectively. The average discount rate used to determine the present value of the obligations was approximately 5.30% in 2014 and 5.30% in 2013. The service cost associated with the plans was $43,000 for 2014, $111,000 for 2013, and $20,000 for 2012. Interest costs were $56,000, $47,000, and $20,000 for 2014, 2013, and 2012, respectively. | ||||||||||
The deferred compensation plan and supplemental income plans are nonqualified and unfunded. Participation in each plan is limited to a select group of management. | ||||||||||
Effective February 1, 2009, the Company established a nonqualified defined benefit retirement plan, which is also unfunded, for certain highly compensated employees. The nonqualified plan ensures that participants receive the full amount of benefits to which they would have been entitled under the noncontributory defined benefit retirement plan in the absence of limits on benefit levels imposed by certain sections of the Internal Revenue Code. | ||||||||||
The components of net periodic pension cost of the nonqualified defined benefit retirement plan for the years ended December 31 are summarized as follows (in thousands): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Service cost | $ | 68 | 71 | 89 | ||||||
Interest cost | 60 | 46 | 43 | |||||||
Amortization of unrecognized (gain) loss | — | 25 | 20 | |||||||
Amortization of unrecognized prior service cost | 15 | 29 | 29 | |||||||
Net periodic pension cost | $ | 143 | 171 | 181 | ||||||
A reconciliation of changes in the projected benefit obligation of the nonqualified defined benefit retirement plan at December 31 follows (in thousands): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Projected benefit obligation at beginning of year | $ | 1,213 | 1,153 | 969 | ||||||
Service cost | 68 | 71 | 89 | |||||||
Interest cost | 60 | 46 | 43 | |||||||
Actuarial (gain) or loss | 407 | (57 | ) | 52 | ||||||
Benefits paid | (7 | ) | — | — | ||||||
Projected benefit obligation at end of year | $ | 1,741 | 1,213 | 1,153 | ||||||
Amounts recognized in other liabilities in the consolidated balance sheets for the nonqualified defined benefit retirement plan at December 31, 2014 and 2013 were $1,741,000 and $1,213,000, respectively. | ||||||||||
The accumulated benefit obligation for the nonqualified defined benefit retirement plan at December 31, 2014 and 2013 was $1,633,000 and $1,022,000, respectively. | ||||||||||
Amounts recognized in accumulated other comprehensive income, net of tax, at December 31 for the nonqualified defined benefit retirement plan consists of (in thousands): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Net actuarial (gain)/loss | $ | 339 | 70 | 125 | ||||||
Past service cost | — | 10 | 29 | |||||||
$ | 339 | 80 | 154 | |||||||
The estimated unrecognized net actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost during 2015 for the nonqualified defined benefit retirement plan is $172,000. | ||||||||||
Key weighted-average assumptions used to determine the benefit obligation and net periodic pension costs for the nonqualified defined benefit retirement plan for the years ended December 31 were as follows: | ||||||||||
2014 | 2013 | 2012 | ||||||||
Benefit obligation: | ||||||||||
Discount rate | 3.95 | % | 4.95 | % | 4.05 | % | ||||
Salary increase rate | 2 | % | 3 | % | 3 | % | ||||
Net periodic pension cost: | ||||||||||
Discount rate | 4.95 | % | 4.05 | % | 4.4 | % | ||||
Salary increase rate | 3 | % | 3 | % | 3 | % | ||||
Amortization period in years | 3.95 | 2.99 | 3 | |||||||
The nonqualified defined benefit retirement plan is not funded. Therefore no contributions will be made in 2015. Estimated future benefit payments reflecting expected future service for the years ended after December 31, 2014 are (in thousands): | ||||||||||
2015 | $ | 68 | ||||||||
2016 | 73 | |||||||||
2017 | 127 | |||||||||
2018 | 126 | |||||||||
2019 | 126 | |||||||||
2020-2023 | 626 | |||||||||
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION | ||||||||||||||||||
The Company established an Ownership Incentive Plan (the "Plan") during 2002 that allowed for stock-based awards to eligible employees, as determined by the Board of Directors. The Plan expired on April 16, 2012. Any outstanding unexercized options, however, continue to be exercisable in accordance with their terms. The awards were in the form of stock options, share awards, and/or appreciation rights. The Plan provided for the issuance of up to 200,000 shares. Option awards were granted with an exercise price equal to the market price of the Company's stock at the date of grant and vest ratably over a five year period and expire ten years after the date of grant. Certain option awards provide for accelerated vesting if there is a change in control, as defined in the Plan. Option exercises could be fulfilled either through available treasury shares or the issuance of new shares. | |||||||||||||||||||
Stock options outstanding at December 31, 2014 were as follows: | |||||||||||||||||||
Outstanding Stock Options | Exercisable Stock Options | ||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
Exercise | Exercise | Remaining | Exercise | Remaining | |||||||||||||||
Price Range | Number | Price | Contractual | Number | Price | Contractual | |||||||||||||
Life (Years) | Life (Years) | ||||||||||||||||||
$9.00 - 10.99 | 23,494 | $ | 9 | 4.1 | 23,494 | $ | 9 | 4.1 | |||||||||||
$11.00 - 12.99 | 63,354 | 12.05 | 5.5 | 43,453 | 12.04 | 5.2 | |||||||||||||
$17.00 - 18.99 | 12,962 | 18.41 | 1.6 | 12,962 | 18.41 | 1.6 | |||||||||||||
99,810 | 12.16 | 4.7 | 79,909 | 12.18 | 4.3 | ||||||||||||||
The following table summarizes stock option activity for 2014: | |||||||||||||||||||
Weighted | |||||||||||||||||||
Average | |||||||||||||||||||
Options | Exercise | ||||||||||||||||||
Price | |||||||||||||||||||
Outstanding at December 31, 2013 | 104,966 | $ | 12.43 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Exercised or canceled | — | — | |||||||||||||||||
Expired | (5,156 | ) | 17.66 | ||||||||||||||||
Outstanding at December 31, 2014 | 99,810 | 12.16 | |||||||||||||||||
Exercisable at December 31, 2014 | 79,909 | 12.18 | |||||||||||||||||
The weighted average remaining contractual life for options exercisable at December 31, 2014 was 4.3 years. | |||||||||||||||||||
The aggregate intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) for options outstanding at December 31, 2014 that were “in the money” (market price greater than exercise price) was $334,000. The aggregate intrinsic value at that date for only the options that were exercisable was $274,000. The intrinsic value changes based on changes in the market value of the Company’s stock. | |||||||||||||||||||
During 2013, the Company received cash of $70,000 in connection with the exercise of 5,620 stock options. During 2012, the Company received cash of $28,000 in connection with the exercise of 2,144 stock options and paid approximately $6,000 to certain option holders in connection with the cancellation of 6,532 options. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2013 was $41,000. Stock options exercised in 2012 did not have a material intrinsic value. | |||||||||||||||||||
The fair value of options granted is estimated at the date of grant using the Black-Scholes option-pricing model. The following table shows the estimated weighted-average fair value of options granted and the assumptions used in calculating that value for the year indicated: | |||||||||||||||||||
2012 | |||||||||||||||||||
Estimated weighted-average fair value of options granted | $ | 2.8 | |||||||||||||||||
Risk-free interest rate | 0.84 | % | |||||||||||||||||
Average dividend | $ | 0.64 | |||||||||||||||||
Volatility factor of the expected market price of the Company's common stock | 39.56 | % | |||||||||||||||||
Average life in years | 6.5 | ||||||||||||||||||
Total expense related to options included in salaries and wages in the consolidated statements of income for the years ended December 31, 2014, 2013, and 2012 was $24,000, $37,000, and $41,000, respectively. The related tax benefit for 2014, 2013, and 2012 was $8,000, $13,000, and $14,000, respectively. Total compensation cost related to option awards to be recognized through the first quarter of 2017 is approximately $27,000. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Earnings Per Share [Abstract] | ||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | |||||||||
Earnings per share for the years ended December 31 were calculated as follows (in thousands, except share and per share data): | ||||||||||
2014 | 2013 | 2012 | ||||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Weighted average number of shares outstanding used in the calculation of basic earnings per common share | 9,297,019 | 7,852,514 | 6,717,357 | |||||||
Add dilutive effect of: | ||||||||||
Stock options | 18,545 | 23,456 | 19,205 | |||||||
Stock warrants | 90,782 | 107,027 | 65,913 | |||||||
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share | 9,406,346 | 7,982,997 | 6,802,475 | |||||||
Earnings per common share: | ||||||||||
Basic | $ | 1.06 | 1.12 | 1.23 | ||||||
Diluted | 1.05 | 1.1 | 1.22 | |||||||
Options to purchase 12,962, 6,400, and 2,248 shares of common stock at weighted average prices of $18.41, $18.95, and $15.44 per share were outstanding at December 31, 2014, 2013, and 2012, respectively, and were not included in the computation of diluted earnings per common share because the exercise prices of the options were greater than the average market prices of the common shares. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions [Abstract] | |||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS | ||||||
The Company has entered into related party transactions with various directors and executive officers. Management believes these transactions do not involve more than a normal risk of collectibility or present other unfavorable features. The following table provides a summary of the loan activity for these officers and directors for the years ended December 31 (in thousands): | |||||||
2014 | 2013 | ||||||
Beginning balance | $ | 1,001 | 1,108 | ||||
Additions | 594 | 217 | |||||
Reductions | (403 | ) | (324 | ) | |||
Ending Balance | $ | 1,192 | 1,001 | ||||
Deposits from executive officers, directors and related interests of such persons held by the Company at December 31, 2014 and 2013 amounted to $3,507,000 and $3,338,000, respectively. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
The majority of LCNB’s financial debt securities are classified as available-for-sale. The securities are reported at fair value with unrealized holding gains and losses reported net of income taxes in accumulated other comprehensive income. | ||||||||||||||||||
LCNB utilizes a pricing service for determining the fair values of most of its investment securities. Fair value for U.S. Treasurynotes are determined based on market quotations (level 1). Fair value for most of the other investment securities is calculatedusing the discounted cash flow method for each security. The discount rates for these cash flows are estimated by the pricing service using rates observed in the market (level 2). Cash flow streams are dependent on estimated prepayment speeds and the overall structure of the securities given existing market conditions. In addition, LCNB has invested in trust preferred securities, equity securities, and four mutual funds that are not priced by the pricing service. Market quotations (level 1) are used to determine fair values for the trust preferred securities and equity securities. Investments in mutual funds that are publicly traded in active markets and that publish daily net asset values are considered to have level 1 inputs. An investment in a mutual fund that is not traded in an active market is considered to have level 2 inputs because an investor can have its interest in the fund redeemed for the balance of its capital account at any quarter-end assuming the fund is given a 60 day notice. The investment in this fund is carried at fair value, which approximates cost. | ||||||||||||||||||
Assets that may be recorded at fair value on a nonrecurring basis include impaired loans, other real estate owned, and other repossessed assets. A loan is considered impaired when management believes it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impaired loans are carried at the present value of estimated future cash flows using the loan's existing rate or the fair value of collateral if the loan is collateral dependent, if this value is less than the loan balance. The inputs are considered to be level 3. | ||||||||||||||||||
Other real estate owned is adjusted to fair value upon transfer of the loan to foreclosed assets, usually based on an appraisal of the property. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. These inputs are also considered to be level 3 | ||||||||||||||||||
The following table summarizes the valuation of LCNB’s assets recorded at fair value by input levels as of December 31 (in thousands): | ||||||||||||||||||
Fair Value Measurements at the End of | ||||||||||||||||||
the Reporting Period Using | ||||||||||||||||||
Fair Value | Quoted | Significant | Significant | |||||||||||||||
Measurements | Prices | Other | Unobservable | |||||||||||||||
in Active | Observable | Inputs | ||||||||||||||||
Markets for | Inputs | (Level 3) | ||||||||||||||||
Identical | (Level 2) | |||||||||||||||||
Assets | ||||||||||||||||||
(Level 1) | ||||||||||||||||||
December 31, 2014 | ||||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||
U.S. Treasury notes | $ | 62,560 | 62,560 | — | — | |||||||||||||
U.S. Agency notes | 83,637 | — | 83,637 | — | ||||||||||||||
U.S. Agency mortgage-backed securities | 38,032 | — | 38,032 | — | ||||||||||||||
Certificates of deposit | 3,086 | — | 3,086 | — | ||||||||||||||
Municipal securities: | ||||||||||||||||||
Non-taxable | 77,395 | — | 77,395 | — | ||||||||||||||
Taxable | 16,395 | — | 16,395 | — | ||||||||||||||
Mutual funds | 2,461 | 1,461 | 1,000 | — | ||||||||||||||
Trust preferred securities | 50 | 50 | — | — | ||||||||||||||
Equity securities | 1,749 | 1,749 | — | — | ||||||||||||||
Total recurring fair value measurements | $ | 285,365 | 65,820 | 219,545 | — | |||||||||||||
Nonrecurring fair value measurements: | ||||||||||||||||||
Impaired loans | $ | 4,872 | — | — | 4,872 | |||||||||||||
Other real estate owned and repossessed assets | 1,370 | — | — | 1,370 | ||||||||||||||
Total nonrecurring fair value measurements | $ | 6,242 | — | — | 6,242 | |||||||||||||
December 31, 2013 | ||||||||||||||||||
Recurring fair value measurement: | ||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||
U.S. Treasury notes | $ | 12,894 | 12,894 | — | — | |||||||||||||
U.S. Agency notes | 106,675 | — | 106,675 | — | ||||||||||||||
U.S. Agency mortgage-backed securities | 40,309 | — | 40,309 | — | ||||||||||||||
Certificates of deposit with other banks | 1,501 | — | 1,501 | — | ||||||||||||||
Municipal securities: | ||||||||||||||||||
Non-taxable | 75,333 | — | 75,333 | — | ||||||||||||||
Taxable | 17,309 | — | 17,309 | — | ||||||||||||||
Mutual funds | 2,380 | 1,380 | 1,000 | — | ||||||||||||||
Trust preferred securities | 147 | 147 | — | — | ||||||||||||||
Equity securities | 1,693 | 1,693 | — | — | ||||||||||||||
Total recurring fair value measurements | $ | 258,241 | 16,114 | 242,127 | — | |||||||||||||
Nonrecurring fair value measurements: | ||||||||||||||||||
Impaired loans | $ | 8,530 | — | 773 | 7,757 | |||||||||||||
Other real estate owned and repossessed assets | 1,463 | — | 1,463 | — | ||||||||||||||
Total nonrecurring fair value measurements | $ | 9,993 | — | 2,236 | 7,757 | |||||||||||||
The following table presents quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements at December 31, 2014 and 2013 (dollars in thousands): | ||||||||||||||||||
Range | ||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Inputs | High | Low | Weighted Average | |||||||||||||
2014 | ||||||||||||||||||
Impaired loans | $ | 4,872 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | |||||||||||||
Discounted cash flows | Discount rate | 10.5 | % | 4 | % | 5.36 | % | |||||||||||
Other real estate owned | 1,370 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | ||||||||||||||
2013 | ||||||||||||||||||
Impaired loans | $ | 7,757 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | |||||||||||||
Carrying amounts and estimated fair values of financial instruments as of December 31 were as follows (in thousands): | ||||||||||||||||||
Fair Value Measurements at the End of | ||||||||||||||||||
the Reporting Period Using | ||||||||||||||||||
Carrying | Fair | Quoted | Significant Other | Significant | ||||||||||||||
Amount | Value | Prices | Observable | Unobservable | ||||||||||||||
in Active | Inputs | Inputs | ||||||||||||||||
Markets for | (Level 2) | (Level 3) | ||||||||||||||||
Identical | ||||||||||||||||||
Assets | ||||||||||||||||||
(Level 1) | ||||||||||||||||||
2014 | ||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||
Cash and cash equivalents | $ | 15,845 | 15,845 | 15,845 | ||||||||||||||
Investment securities, held-to-maturity | 22,725 | 22,138 | 22,138 | |||||||||||||||
Federal Reserve Bank stock | 2,346 | 2,346 | 2,346 | |||||||||||||||
Federal Home Loan Bank stock | 3,638 | 3,638 | 3,638 | |||||||||||||||
Loans, net | 695,835 | 699,715 | 699,715 | |||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||
Deposits | 946,205 | 947,541 | 731,766 | 215,775 | ||||||||||||||
Short-term borrowings | 16,645 | 16,645 | 16,645 | |||||||||||||||
Long-term debt | 11,357 | 11,944 | 11,944 | |||||||||||||||
2013 | ||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||
Cash and cash equivalents | $ | 14,688 | 14,688 | 14,688 | ||||||||||||||
Investment securities, held-to-maturity | 16,323 | 16,196 | 16,196 | |||||||||||||||
Federal Reserve Bank stock | 1,603 | 1,603 | 1,603 | |||||||||||||||
Federal Home Loan Bank stock | 2,854 | 2,854 | 2,854 | |||||||||||||||
Loans, net | 570,766 | 573,163 | 773 | 572,390 | ||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||
Deposits | 785,761 | 788,096 | 599,838 | 188,258 | ||||||||||||||
Short-term borrowings | 8,655 | 8,655 | 8,655 | |||||||||||||||
Long-term debt | 12,102 | 12,842 | 12,842 | |||||||||||||||
The fair value of off-balance-sheet financial instruments at December 31, 2014 and 2013 was not material. | ||||||||||||||||||
Fair values of financial instruments are based on various assumptions, including the discount rate and estimates of future cash flows. Therefore, the fair values presented may not represent amounts that could be realized in actual transactions. In addition, because the required disclosures exclude certain financial instruments and all nonfinancial instruments, any aggregation of the fair value amounts presented would not represent the underlying value of the Company. The following methods and assumptions were used to estimate the fair value of certain financial instruments: | ||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||
The carrying amounts presented are deemed to approximate fair value. | ||||||||||||||||||
Investment securities | ||||||||||||||||||
Fair values for securities, excluding Federal Home Loan Bank and Federal Reserve Bank stock, are based on quoted market prices, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities and/or discounted cash flow analysis. The carrying value of Federal Home Loan Bank and Federal Reserve Bank stock approximates fair value based on the respective redemptive provisions. | ||||||||||||||||||
Loans | ||||||||||||||||||
Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, incorporating assumptions of current and projected prepayment speeds. These current rates approximate market rates. | ||||||||||||||||||
Deposits | ||||||||||||||||||
The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities, which approximates market rates. | ||||||||||||||||||
Borrowings | ||||||||||||||||||
The carrying amounts of federal funds purchased, repurchase agreements, and U.S. Treasury demand note borrowings are deemed to approximate fair value of short-term borrowings. For long-term debt, fair values are estimated based on the discounted value of expected net cash flows using current interest rates. |
QUARTERLY_RESULTS_OF_OPERATION
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ||||||||||||
The following table sets forth certain quarterly results for the years ended December 31, 2014 and 2013 (dollars in thousands, except per share data): | |||||||||||||
Three Months Ended | |||||||||||||
31-Mar | 30-Jun | Sep. 30 | Dec. 31 | ||||||||||
2014 | |||||||||||||
Interest income | $ | 9,278 | 9,926 | 9,906 | 10,367 | ||||||||
Interest expense | 915 | 920 | 911 | 844 | |||||||||
Net interest income | 8,363 | 9,006 | 8,995 | 9,523 | |||||||||
Provision for loan losses | 81 | 255 | 401 | 193 | |||||||||
Net interest income after provision | 8,282 | 8,751 | 8,594 | 9,330 | |||||||||
Total non-interest income | 2,077 | 2,301 | 2,315 | 2,449 | |||||||||
Total non-interest expenses | 8,672 | 7,600 | 7,238 | 7,334 | |||||||||
Income before income taxes | 1,687 | 3,452 | 3,671 | 4,445 | |||||||||
Provision for income taxes | 364 | 841 | 953 | 1,228 | |||||||||
Net income | $ | 1,323 | 2,611 | 2,718 | 3,217 | ||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.14 | 0.28 | 0.3 | 0.34 | ||||||||
Diluted | 0.14 | 0.28 | 0.29 | 0.34 | |||||||||
2013 | |||||||||||||
Interest income | $ | 8,076 | 8,405 | 8,450 | 8,566 | ||||||||
Interest expense | 1,098 | 1,045 | 995 | 927 | |||||||||
Net interest income | 6,978 | 7,360 | 7,455 | 7,639 | |||||||||
Provision for loan losses | 149 | 42 | 178 | 219 | |||||||||
Net interest income after provision | 6,829 | 7,318 | 7,277 | 7,420 | |||||||||
Total non-interest income | 2,507 | 2,178 | 2,047 | 2,358 | |||||||||
Total non-interest expenses | 7,091 | 6,324 | 6,163 | 6,634 | |||||||||
Income before income taxes | 2,245 | 3,172 | 3,161 | 3,144 | |||||||||
Provision for income taxes | 517 | 824 | 804 | 797 | |||||||||
Net income | $ | 1,728 | 2,348 | 2,357 | 2,347 | ||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.23 | 0.31 | 0.31 | 0.27 | ||||||||
Diluted | 0.23 | 0.3 | 0.3 | 0.27 | |||||||||
PARENT_COMPANY_FINANCIAL_INFOR
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||
PARENT COMPANY FINANCIAL INFORMATION | PARENT COMPANY FINANCIAL INFORMATION | |||||||||
Condensed financial information for LCNB Corp., parent company only, follows (in thousands): | ||||||||||
Condensed Balance Sheets: | ||||||||||
December 31, | 2014 | 2013 | ||||||||
Assets: | ||||||||||
Cash on deposit with subsidiary | $ | 3,985 | 26,493 | |||||||
Investment securities available-for-sale, at fair value | 1,970 | 2,019 | ||||||||
Investment in subsidiary | 119,350 | 90,437 | ||||||||
Other assets | 419 | 33 | ||||||||
Total assets | $ | 125,724 | 118,982 | |||||||
Liabilities | $ | 29 | 109 | |||||||
Shareholders' equity | 125,695 | 118,873 | ||||||||
Total liabilities and shareholders' equity | $ | 125,724 | 118,982 | |||||||
Condensed Statements of Income | ||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | |||||||
Income: | ||||||||||
Dividends from subsidiaries | $ | 8,800 | 10,525 | 3,800 | ||||||
Interest and dividends | 91 | 89 | 110 | |||||||
Net gain on sales of securities | 10 | 124 | 63 | |||||||
Total income | 8,901 | 10,738 | 3,973 | |||||||
Total expenses | 1,077 | 127 | 107 | |||||||
Income before income tax expense/benefit and equity in undistributed income of subsidiaries | 7,824 | 10,611 | 3,866 | |||||||
Income tax (expense) benefit | 350 | (12 | ) | (1 | ) | |||||
Equity in undistributed income (loss) of subsidiaries | 1,695 | (1,819 | ) | 4,405 | ||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Condensed Statements of Cash Flows | ||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Adjustments for non-cash items - | ||||||||||
(Increase) decrease in undistributed income of subsidiaries | (1,695 | ) | 1,819 | (4,405 | ) | |||||
Other, net | (474 | ) | 7 | (403 | ) | |||||
Net cash flows from operating activities | 7,700 | 10,606 | 3,462 | |||||||
Cash flows from investing activities: | ||||||||||
Purchases of securities available-for-sale | (107 | ) | (563 | ) | (872 | ) | ||||
Proceeds from sales of available-for-sale securities | 227 | 569 | 3,384 | |||||||
Cash paid for business acquisition | (24,750 | ) | (7,815 | ) | — | |||||
Net cash flows from (used in) investing activities | (24,630 | ) | (7,809 | ) | 2,512 | |||||
Cash flows from financing activities: | ||||||||||
Principal payments on long-term debt | — | (1,792 | ) | — | ||||||
Proceeds from issuance of common stock | 372 | 27,238 | 333 | |||||||
Cash dividends paid on common stock | (5,950 | ) | (5,148 | ) | (4,299 | ) | ||||
Other | — | 70 | 28 | |||||||
Net cash flows from (used in) financing activities | (5,578 | ) | 20,368 | (3,938 | ) | |||||
Net change in cash | (22,508 | ) | 23,165 | 2,036 | ||||||
Cash at beginning of year | 26,493 | 3,328 | 1,292 | |||||||
Cash at end of year | $ | 3,985 | 26,493 | 3,328 | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
BASIS OF PRESENTATION | BASIS OF PRESENTATION | |
The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions are eliminated in consolidation. The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles and with general practices in the banking industry. | ||
Certain prior period data presented in the financial statements have been reclassified to conform with the current year presentation. | ||
USE OF ESTIMATES | USE OF ESTIMATES | |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | |
For purposes of reporting cash flows, cash and cash equivalents include cash, balances due from banks, federal funds sold, and interest-bearing demand deposits with original maturities of three months or less. Deposits with other banks routinely have balances greater than FDIC insured limits. Management considers the risk of loss to be very low with respect to such deposits. | ||
INVESTMENT SECURITIES | INVESTMENT SECURITIES | |
Certain municipal debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and recorded at amortized cost. Securities not classified as held-to-maturity are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income, a separate component of shareholders’ equity. Amortization of premiums and accretion of discounts are recognized as adjustments to interest income using the level-yield method. Realized gains or losses from the sale of securities are recorded on the trade date and are computed using the specific identification method. | ||
Declines in the fair value of securities below their cost that are deemed to be other-than-temporarily impaired and for which the Company does not intend to sell the securities and it is not more likely than not that the securities will be sold before the anticipated recovery of the impairment are separated into losses related to credit factors and losses related to other factors. The losses related to credit factors are recognized in earnings and losses related to other factors are recognized in other comprehensive income. In estimating other than temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The Company's consolidated statements of income as of December 31, 2014, 2013, and 2012, do not reflect any such impairment. | ||
Federal Home Loan Bank ("FHLB") stock is an equity interest in the Federal Home Loan Bank of Cincinnati. It can be sold only at its par value of $100 per share and only to the FHLB or to another member institution. In addition, the equity ownership rights are more limited than would be the case for a public company because of the oversight role exercised by the Federal Housing Finance Agency in the process of budgeting and approving dividends. Federal Reserve Bank stock is similarly restricted in marketability and value. Both investments are carried at cost, which is their par value. | ||
FHLB and Federal Reserve Bank stock are both subject to minimum ownership requirements by member banks. The required investments in common stock are based on predetermined formulas. | ||
LOANS | LOANS | |
The Company’s loan portfolio includes most types of commercial and industrial loans, commercial loans secured by real estate, residential real estate loans, consumer loans, agricultural loans and other types of loans. Most of the properties collateralizing the loan portfolio are located within the Company’s market area. | ||
Loans are stated at the principal amount outstanding, net of unearned income, deferred origination fees and costs, and the allowance for loan losses. Interest income is accrued on the unpaid principal balance. The delinquency status of a loan is based on contractual terms and not on how recently payments have been received. Generally, a loan is placed on non-accrual status when it is classified as impaired or there is an indication that the borrower’s cash flow may not be sufficient to make payments as they come due, unless the loan is well secured and in the process of collection. Subsequent cash receipts on non-accrual loans are recorded as a reduction of principal and interest income is recorded once principal recovery is reasonably assured. The current year's accrued interest on loans placed on non-accrual status is charged against earnings. Previous years' accrued interest is charged against the allowance for loan losses. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer a reasonable doubt as to the timely collection of interest or principal. | ||
Loan origination fees and certain direct loan origination costs are deferred and the net amount amortized as an adjustment of loan yields. These amounts are being amortized over the lives of the related loans. | ||
In the ordinary course of business, the Company enters into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan losses. | ||
ALLOWANCE FOR LOAN LOSSES | ALLOWANCE FOR LOAN LOSSES | |
The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely. Consumer loans are charged off when they reach 120 days past due. Subsequent recoveries, if any, are credited to the allowance. | ||
The provision for loan losses is determined by management based upon its evaluation of the amount needed to maintain the allowance for loan losses at a level considered appropriate in relation to the estimated risk of losses inherent in the portfolio. Current methodology used by management to estimate the allowance takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, historic categorical trends, current delinquency levels as related to historical levels, portfolio growth rates, changes in composition of the portfolio, the current economic environment, as well as current allowance adequacy in relation to the portfolio. Management is cognizant that reliance on historical information coupled with the cyclical nature of the economy, including credit cycles, affects the allowance. Management considers all of these factors prior to making any adjustments to the allowance due the subjectivity and imprecision involved in allocation methodology. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. | ||
The allowance consists of specific and general components. The specific component relates to loans that are specifically reviewed for impairment. For such loans, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers loans not specifically reviewed for impairment and homogeneous loan pools, such as residential real estate and consumer loans. The general component is measured for each loan category separately based on each category’s average of historical loss experience over a trailing thirty-six month period, adjusted for qualitative factors. Such qualitative factors may include current economic conditions if different from the three-year historical loss period, trends in underperforming loans, trends in volume and terms of loan categories, concentrations of credit, and trends in loan quality. | ||
A loan is considered impaired when management believes, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. An impaired loan is measured by the present value of expected future cash flows using the loan's effective interest rate. An impaired collateral-dependent loan may be measured based on collateral value. Smaller-balance homogeneous loans, including residential mortgage and consumer installment loans, that are not evaluated individually are collectively evaluated for impairment. | ||
Loans acquired from the merger are recorded at fair value with no carryover of the acquired entity's previously established allowance for loan losses. The excess of expected cash flows over the estimated fair value of acquired loans is recognized as interest income over the remaining contractual lives of the loans using the level yield method. | ||
Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then-remaining contractual lives of the loans. | ||
Impaired loans acquired are accounted for under FASB ASC 310-30. Factors considered in evaluating whether an acquired loan was impaired include delinquency status and history, updated borrower credit status, collateral information, and updated loan-to-value information. The difference between contractually required payments at the time of acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. The interest component of the cash flows expected to be collected is referred to as the accretable yield and is recognized as interest income over the remaining contractual life of the loan using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in a reclassification from the nonaccretable difference to the accretable yield. | ||
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT | |
Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on both the straight-line and accelerated methods over the estimated useful lives of the assets, generally 15 to 40 years for premises and 3 to 10 years for equipment. Leasehold improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Costs incurred for maintenance and repairs are expensed as incurred. | ||
OTHER REAL ESTATE OWNED | OTHER REAL ESTATE OWNED | |
Other real estate owned includes properties acquired through foreclosure or deed in lieu of foreclosure. Such property is held for sale and is initially recorded at fair value, less costs to sell, establishing a new cost basis. Fair value is primarily based on a property appraisal obtained at the time of transfer and any periodic updates that may be obtained thereafter. The allowance for loan losses is charged for any write down of the loan’s carrying value to fair value at the date of acquisition. Any subsequent reductions in fair value and expenses incurred from holding other real estate owned are charged to other non-interest expense. Costs, excluding interest, relating to the improvement of other real estate owned are capitalized. Gains and losses from the sale of other real estate owned are included in other non-interest expense. | ||
Other real estate owned also includes in-substance foreclosed properties, which are properties that the Company has taken physical control of, regardless of whether formal foreclosure proceedings have occurred. | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS | |
Goodwill is the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is not amortized, but is instead subject to an annual review for impairment. | ||
Mortgage servicing rights on originated mortgage loans that have been sold are initially recorded at their estimated fair values. Mortgage servicing rights are amortized to loan servicing income in proportion to and over the period of estimated servicing income. Such assets are periodically evaluated as to the recoverability of their carrying value. | ||
The Company’s other intangible asset relates to core deposits acquired from business combinations. These intangible assets are amortized on a straight-line basis over their estimated useful lives. Management evaluates whether events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised. | ||
BANK OWNED LIFE INSURANCE | BANK OWNED LIFE INSURANCE | |
The Company has purchased life insurance policies on certain officers of the Company. The Company is the beneficiary of these policies and has recorded the estimated cash surrender value in other assets in the consolidated balance sheets. Income on the policies, based on the increase in cash surrender value and any incremental death benefits, is included in other non-interest income in the consolidated statements of income. | ||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | |
Accounting guidance establishes a fair value hierarchy to prioritize the inputs to valuation techniques used to measure fair value. A financial instrument’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The three broad input levels are: | ||
• | Level 1 – quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the reporting date; | |
• | Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly; and | |
• | Level 3 - inputs that are unobservable for the asset or liability. | |
Accounting guidance permits, but does not require, companies to measure many financial instruments and certain other items at fair value. The decision to elect the fair value option is made individually for each instrument and is irrevocable once made. Changes in fair value for the selected instruments are recorded in earnings. The Company did not select any financial instruments for the fair value election in 2014 or 2013. | ||
ADVERTISING EXPENSE | ADVERTISING EXPENSE | |
Advertising costs are expensed as incurred and are recorded as a marketing expense, a component of non-interest expense. | ||
PENSION PLAN | PENSION PLANS | |
Eligible employees of the Company hired before 2009 participate in a multiple-employer qualified noncontributory defined benefit retirement plan. This plan is accounted for as a multi-employer plan because assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. | ||
Citizens National Bank had a qualified noncontributory, defined benefit pension plan, which has been assumed by the Company, that covers eligible employees hired before May 1, 2005. This is a single employer plan. | ||
TREASURY STOCK | TREASURY STOCK | |
Common stock shares repurchased are recorded at cost. Cost of shares retired or reissued is determined using the weighted average method. | ||
STOCK OPTIONS | STOCK OPTIONS | |
The cost of employee services received in exchange for stock option grants is the grant-date fair value of the award estimated using an option-pricing model. This estimated cost is recognized over the period the employee is required to provide services in exchange for the award, usually the vesting period. The Company uses a Black-Scholes pricing model and related assumptions for estimating the fair value of stock option grants and a five-year vesting period. | ||
INCOME TAXES | INCOME TAXES | |
Deferred income taxes are determined using the liability method of accounting. Under this method, the net deferred tax asset or liability is determined based on the tax effects of temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. | ||
Management analyzes material tax positions taken in any income tax return for any tax jurisdiction and determines the likelihood of the positions being sustained in a tax examination. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. | ||
EARNINGS PER SHARE | EARNINGS PER SHARE | |
Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is adjusted for the dilutive effects of stock options and warrants. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options and warrants with the proceeds used to purchase treasury shares at the average market price for the period. | ||
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS | |
Financial Accounting Standards Board Accounting Standards Update ("ASU") No. 2014-01, "Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-01 was issued in January 2014 and provides guidance on accounting for investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credits. Entities are permitted to make an accounting policy election to account for such investments using the proportional amortization method, as defined, if certain enumerated conditions are met. Under the proportional amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). Investments not accounted for using the proportional amortization method should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323. ASU No. 2014-01 is effective for public companies for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014 and is to be applied retrospectively to all periods presented. LCNB currently does not have any investments in qualified affordable housing projects and adoption of ASU No. 2014-01 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-04, "Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-04 was issued in January 2014 and clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor through completion of a deed in lieu of foreclosure or through a similar legal agreement. In addition, the update requires interim and annual disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate properties that are in the process of foreclosure. ASU No. 2014-04 is effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Adoption of ASU No. 2014-04 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" | ||
ASU No. 2014-08 was issued in April 2014 and changes the criteria for reporting discontinued operations and provides for expanded disclosures in this area. The new guidance provides that only disposals representing a strategic shift in operations should be presented as discontinued operations and that these strategic shifts should have a major effect on an organization's operations and financial results. ASU No. 2014-08 is effective in the first quarter of 2015 for public companies with calendar year-ends. | ||
ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" | ||
ASU No. 2014-09 was issued in May 2014 and and supersedes most current revenue recognition guidance for contracts to transfer goods or services or other nonfinancial assets. Lease contracts, insurance contracts, and most financial instruments are not included in the scope of this update. ASU No. 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Additional disclosures providing information about contracts with customers are required. ASU No. 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Transitional guidance is included in the update; early adoption is not permitted. Since LCNB's products are substantially financial in nature, adoption of ASU No. 2014-09 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-11, "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures" | ||
ASU No. 2014-11 was issued in June 2014 and requires two accounting changes: | ||
• | the accounting for repurchase-to-maturity transactions is changed to secured borrowing accounting, and | |
• | for repurchase financing arrangements, separate accounting is required for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which results in secured borrowing accounting. | |
Additional disclosures are required. ASU No. 2014-11 is effective for public business entities for the first interim or annual period beginning after December 15, 2014. Changes in accounting for transactions outstanding on the effective date are to be recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Since LCNB already accounts for repurchase agreements as borrowings, this update is not expected to have a material impact on LCNB's results of operation or financial position. | ||
ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, a consensus of the FASB Emerging Issues Task Force" | ||
ASU No. 2014-12 was issued in June 2014 and requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and that current guidance for awards with performance conditions be followed. ASU No. 2014-12 is effective for all entities for annual and interim periods beginning after December 15, 2015 and early adoption is permitted. Entities may apply the amendments in the update either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. None of LCNB's currently outstanding stock option grants contain the performance targets described in this update and adoption of ASU No. 2014-11 is not expected to have a material impact on its results of operations or financial position. | ||
ASU No. 2014-13, "Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-13 was issued in August 2014 and applies to entities that are required to (1) consolidate a collateralized financing entity ("CFE") under the guidance for Variable Interest Entities, (2) measure all of the financial assets and financial liabilities of the CFE at fair value, and (3) reflect the changes in fair value in earnings. Under ASU 2014-13, entities that meet these criteria can elect to measure both the financial assets and the financial liabilities of the CFE using the more observable of the fair value of the financial assets and the fair value of the financial liabilities, thereby eliminating the difference between the fair value of financial assets and financial liabilities. If that alternative is not elected, then ASU 2014-13 indicates that the fair value of the financial assets and the fair value of the financial liabilities of the consolidated CFE should be measured in accordance with ASC 820, Fair Value Measurement, and differences between the fair value of the financial assets and the financial liabilities of the consolidated CFE should be reflected in earnings and attributed to the reporting entity in the consolidated statement of income or loss. The provisions of ASU 2014-13 are effective for public business entities for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. LCNB currently does not have any CFE investments and adoption of ASU No. 2014-13 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-14, "Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-14 was issued in August 2014 and affects creditors with government-guaranteed residential mortgage loans, including those guaranteed by the Federal Housing Administration and the U.S. Department of Veterans Affairs. ASU No. 2014-14 requires that a residential mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions described in the update are met. The amendments in ASU No. 2014-14 are in effect for public business entities for annual periods, and interim periods within such periods, starting after December 15, 2014. LCNB currently does not hold any government-guaranteed residential mortgage loans and adoption of ASU No. 2014-14 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern" | ||
ASU No. 2014-15 was issued in August 2014 and requires management to evaluate for each annual and interim reporting period whether it is probable that the entity will not be able to meet its obligations as they become due within one year after the date that financial statements are issued (or are available to be issued, where applicable). Certain disclosures, as described in the update, are required if management identifies substantial doubt about the entity's ability to continue as a going concern. ASU No. 2014-15 will take effect in the annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. Adoption of ASU No. 2014-15 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-16, "Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-16 was issued in November 2014 and requires an entity to determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of the relevant facts and circumstances, when evaluating whether the host contract is more akin to a debt or equity instrument. ASU No. 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The effects of initially adopting ASU No. 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the update is effective. Retrospective application to all relevant prior periods is permitted. Early adoption, including adoption in an interim period, is permitted. LCNB currently does not have any outstanding hybrid financial instruments issued as a share and adoption of ASU No. 2014-16 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2014-17, "Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force)" | ||
ASU No. 2014-17 was issued in November 2014 and applies to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity upon the occurrence of an event in which an acquirer obtains control of the acquired entity. The update allows an acquired entity the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurred, an acquired entity has the option to apply pushdown accounting in a subsequent reporting period provided the change in considered a change in accounting principle in accordance with Topic 250, "Accounting Changes and Error Corrections." Certain disclosures are required if pushdown accounting is elected. An election to apply pushdown accounting is irrevocable. ASU No. 2014-17 is effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. LCNB currently does not have any subsidiaries issuing separate financial statements and adoption of ASU No. 2014-17 is not expected to have a material impact on LCNB's results of operations or financial position. | ||
ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" | ||
ASU No. 2015-01 was issued in January 2015 and eliminates from the income statement the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. Adoption of ASU No. 2015-01 is not expected to have a material impact on LCNB's results of operations. | ||
ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" | ||
ASU No. 2015-02 was issued in February 2015 and provides additional guidance for consolidation of legal entities. It (1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (2) eliminates the presumption that a general partner should consolidate a limited partnership, (3) affects the consolidation analysis of reporting entities that are involved with variable interest entities, and (4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Adoption of ASU No. 2015-02 is not expected to have a material impact on LCNB's results of operations or financial position. |
ACQUISITION_Tables
ACQUISITION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Business Combinations [Abstract] | ||||||||||
Fair Values of Assets Acquired, Liabilities Assumed, and Consideration Paid | The merger with Eaton National was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands): | |||||||||
Consideration Paid: | ||||||||||
Cash paid to shareholder | $ | 24,750 | ||||||||
Identifiable Assets Acquired: | ||||||||||
Cash and cash equivalents | 15,635 | |||||||||
Investment securities: | ||||||||||
Available-for-sale | 35,859 | |||||||||
Federal Reserve Bank stock | 41 | |||||||||
Federal Home Loan Bank stock | 784 | |||||||||
Loans | 115,944 | |||||||||
Premises and equipment | 1,314 | |||||||||
Bank owned life insurance | 3,618 | |||||||||
Core deposit intangible | 2,466 | |||||||||
Other real estate owned | 262 | |||||||||
Other assets | 1,624 | |||||||||
Total identifiable assets acquired | 177,547 | |||||||||
Liabilities Assumed: | ||||||||||
Deposits | 165,335 | |||||||||
Short-term borrowings | 651 | |||||||||
Other liabilities | 263 | |||||||||
Total liabilities assumed | 166,249 | |||||||||
Total Identifiable Net Assets Acquired | 11,298 | |||||||||
Goodwill resulting from merger | $ | 13,452 | ||||||||
The merger with First Capital was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands): | ||||||||||
Consideration Paid: | ||||||||||
Common shares issued (888,811) | $ | 12,354 | ||||||||
Cash paid to shareholders | 7,828 | |||||||||
Total value of consideration paid | 20,182 | |||||||||
Identifiable Assets Acquired: | ||||||||||
Cash and cash equivalents | 17,632 | |||||||||
Investment securities: | ||||||||||
Available-for-sale | 21,606 | |||||||||
Held-to-maturity | 384 | |||||||||
Federal Reserve Bank stock | 157 | |||||||||
Federal Home Loan Bank stock | 763 | |||||||||
Loans | 98,904 | |||||||||
Premises and equipment | 3,949 | |||||||||
Bank owned life insurance | 3,687 | |||||||||
Core deposit intangible | 2,574 | |||||||||
Other real estate owned | 127 | |||||||||
Deferred income taxes | 185 | |||||||||
Other assets | 1,380 | |||||||||
Total identifiable assets acquired | 151,348 | |||||||||
Liabilities Assumed: | ||||||||||
Deposits | 136,823 | |||||||||
Long-term debt | 1,792 | |||||||||
Other liabilities | 822 | |||||||||
Total liabilities assumed | 139,437 | |||||||||
Total Identifiable Net Assets Acquired | 11,911 | |||||||||
Goodwill resulting from merger | $ | 8,271 | ||||||||
Results of Operations are Included in Consolidated Statement of Income from the Date of Merger | The results of operations are included in the consolidated statement of income from the dates of the mergers. The estimated amount of Eaton National's revenue (net interest income plus non-interest income) and net income, excluding merger and data conversion costs, included in LCNB's consolidated statement of income for 2014 were as follows (in thousands): | |||||||||
Total revenue | $ | 6,608 | ||||||||
Net income | 2,997 | |||||||||
Acquired Entity's Estimated Pro Forma Financial Information | The following table presents unaudited pro forma information as if the merger with Eaton National had occurred on January 1, 2012 (in thousands). This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of the core deposit intangible, and related income tax effects. It does not include merger and data conversion costs. The pro forma information does not necessarily reflect the results of operations that would have occurred had the merger with First Capital occurred in 2012. In particular, expected operational cost savings are not reflected in the pro forma amounts. | |||||||||
For Years Ended December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||
Total revenue | $ | 44,768 | 47,183 | 43,287 | ||||||
Net income | 10,275 | 10,670 | 10,668 | |||||||
Basic earnings per common share | 1.11 | 1.36 | 1.28 | |||||||
Diluted earnings per common share | 1.09 | 1.34 | 1.26 | |||||||
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
Amortized Cost and Fair Value of Available-for-Sale Investment Securities | The amortized cost and fair value of available-for-sale investment securities at December 31 are summarized as follows (in thousands): | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
2014 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 62,406 | 290 | 136 | 62,560 | ||||||||
U.S. Agency notes | 84,661 | 188 | 1,212 | 83,637 | |||||||||
U.S. Agency mortgage-backed securities | 37,838 | 413 | 219 | 38,032 | |||||||||
Certificates of deposit | 3,076 | 10 | — | 3,086 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 75,727 | 1,972 | 304 | 77,395 | |||||||||
Taxable | 16,005 | 465 | 75 | 16,395 | |||||||||
Mutual funds | 2,483 | — | 22 | 2,461 | |||||||||
Trust preferred securities | 50 | — | — | 50 | |||||||||
Equity securities | 1,415 | 372 | 38 | 1,749 | |||||||||
$ | 283,661 | 3,710 | 2,006 | 285,365 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 22,525 | 108 | 695 | 21,938 | ||||||||
Taxable | 200 | — | — | 200 | |||||||||
$ | 22,725 | 108 | 695 | 22,138 | |||||||||
2013 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 13,184 | — | 290 | 12,894 | ||||||||
U.S. Agency notes | 110,248 | 141 | 3,714 | 106,675 | |||||||||
U.S. Agency mortgage-backed securities | 40,602 | 555 | 848 | 40,309 | |||||||||
Certificates of deposit | 1,492 | 9 | — | 1,501 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 74,185 | 2,116 | 968 | 75,333 | |||||||||
Taxable | 17,020 | 503 | 214 | 17,309 | |||||||||
Mutual funds | 2,419 | — | 39 | 2,380 | |||||||||
Trust preferred securities | 149 | 4 | 6 | 147 | |||||||||
Equity securities | 1,429 | 329 | 65 | 1,693 | |||||||||
$ | 260,728 | 3,657 | 6,144 | 258,241 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 15,923 | 159 | 285 | 15,797 | ||||||||
Taxable | 400 | — | 1 | 399 | |||||||||
$ | 16,323 | 159 | 286 | 16,196 | |||||||||
Securities in a Continuous Loss Position | Information concerning securities with gross unrealized losses at December 31, 2014 and 2013, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (in thousands): | ||||||||||||
Less Than Twelve Months | Twelve Months or More | ||||||||||||
Fair | Unrealized | Fair | Unrealized | ||||||||||
Value | Losses | Value | Losses | ||||||||||
2014 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 9,141 | 7 | 8,774 | 129 | ||||||||
U.S. Agency notes | — | — | 65,971 | 1,212 | |||||||||
U.S. Agency mortgage-backed securities | 3,795 | 2 | 11,456 | 217 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 7,211 | 58 | 11,419 | 246 | |||||||||
Taxable | 3,117 | 15 | 3,668 | 60 | |||||||||
Mutual funds | 281 | 12 | 1,190 | 10 | |||||||||
Trust preferred securities | 50 | — | — | — | |||||||||
Equity securities | 197 | 29 | 123 | 9 | |||||||||
$ | 23,792 | 123 | 102,601 | 1,883 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 8,152 | 540 | 4,200 | 155 | ||||||||
Taxable | — | — | — | — | |||||||||
$ | 8,152 | 540 | 4,200 | 155 | |||||||||
2013 | |||||||||||||
Investment Securities Available-for-Sale: | |||||||||||||
U.S. Treasury notes | $ | 12,894 | 290 | — | — | ||||||||
U.S. Agency notes | 89,080 | 2,880 | 9,636 | 834 | |||||||||
U.S. Agency mortgage-backed securities | 17,557 | 575 | 5,130 | 273 | |||||||||
Municipal securities: | |||||||||||||
Non-taxable | 15,641 | 398 | 10,751 | 570 | |||||||||
Taxable | 4,903 | 202 | 1,252 | 12 | |||||||||
Mutual funds | 1,380 | 39 | — | — | |||||||||
Trust preferred securities | — | — | 93 | 6 | |||||||||
Equity securities | 300 | 44 | 93 | 21 | |||||||||
$ | 141,755 | 4,428 | 26,955 | 1,716 | |||||||||
Investment Securities Held-to-Maturity: | |||||||||||||
Municipal securities: | |||||||||||||
Non-taxable | $ | 4,890 | 285 | — | — | ||||||||
Taxable | 399 | 1 | — | — | |||||||||
$ | 5,289 | 286 | — | — | |||||||||
Investments Classified by Contractual Maturity Date | Contractual maturities of investment securities at December 31, 2014 were as follows (in thousands). Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations. | ||||||||||||
Available-for-Sale | Held-to-Maturity | ||||||||||||
Amortized | Fair | Amortized | Fair | ||||||||||
Cost | Value | Cost | Value | ||||||||||
Due within one year | $ | 10,961 | 11,071 | 2,649 | 2,661 | ||||||||
Due from one to five years | 133,901 | 134,894 | 3,669 | 3,665 | |||||||||
Due from five to ten years | 92,453 | 92,493 | 4,175 | 4,063 | |||||||||
Due after ten years | 4,560 | 4,615 | 12,232 | 11,749 | |||||||||
241,875 | 243,073 | 22,725 | 22,138 | ||||||||||
U.S. Agency mortgage-backed securities | 37,838 | 38,032 | — | — | |||||||||
Mutual funds | 2,483 | 2,461 | — | — | |||||||||
Trust preferred securities | 50 | 50 | — | — | |||||||||
Equity securities | 1,415 | 1,749 | — | — | |||||||||
$ | 283,661 | 285,365 | 22,725 | 22,138 | |||||||||
Realized Gain (Loss) on Investment Securities Available-for-Sale | Certain information concerning the sale of investment securities available-for-sale for the years ended December 31 was as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Proceeds from sales | $ | 67,296 | 59,284 | 90,573 | |||||||||
Gross realized gains | 252 | 1,234 | 1,860 | ||||||||||
Gross realized losses | 103 | 174 | 7 | ||||||||||
LOANS_Tables
LOANS (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||
Major Classifications of Loans | Major classifications of loans at December 31 were as follows (in thousands): | |||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 35,424 | 29,337 | |||||||||||||||||||
Commercial, secured by real estate | 379,141 | 314,252 | ||||||||||||||||||||
Residential real estate | 254,087 | 215,587 | ||||||||||||||||||||
Consumer | 18,006 | 12,643 | ||||||||||||||||||||
Agricultural | 11,472 | 2,472 | ||||||||||||||||||||
Other loans, including deposit overdrafts | 680 | 91 | ||||||||||||||||||||
698,810 | 574,382 | |||||||||||||||||||||
Deferred origination costs (fees), net | 146 | (28 | ) | |||||||||||||||||||
698,956 | 574,354 | |||||||||||||||||||||
Less allowance for loan losses | 3,121 | 3,588 | ||||||||||||||||||||
Loans-net | $ | 695,835 | 570,766 | |||||||||||||||||||
Schedule of Acquired Non Impaired Loans | The following table provides certain information at the acquisition date on loans acquired from Eaton National, not including loans considered to be impaired (in thousands): | |||||||||||||||||||||
Contractually required principal at acquisition | $ | 102,483 | ||||||||||||||||||||
Less fair value adjustment | 1,347 | |||||||||||||||||||||
Fair value of acquired loans | $ | 101,136 | ||||||||||||||||||||
Contractual cash flows not expected to be collected | $ | 1,702 | ||||||||||||||||||||
Acquired Loans Accounted for in Accordance with FASB ASC 310-30 | The following table provides details on acquired impaired loans obtained through the merger with Eaton National that are accounted for in accordance with FASB ASC 310-30 (in thousands): | |||||||||||||||||||||
Contractually required principal at acquisition | $ | 23,414 | ||||||||||||||||||||
Contractual cash flows not expected to be collected (nonaccretable difference) | (6,088 | ) | ||||||||||||||||||||
Expected cash flows at acquisition | 17,326 | |||||||||||||||||||||
Interest component of expected cash flows (accretable discount) | (2,163 | ) | ||||||||||||||||||||
Fair value of acquired impaired loans | $ | 15,163 | ||||||||||||||||||||
Non-accrual, Past Due, and Accruing Restructured Loans | Non-accrual, past-due, and accruing restructured loans at December 31 were as follows (in thousands): | |||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||||
Commercial and industrial | $ | — | 144 | |||||||||||||||||||
Commercial, secured by real estate | 4,277 | 1,418 | ||||||||||||||||||||
Agricultural | 70 | — | ||||||||||||||||||||
Residential real estate | 1,252 | 1,399 | ||||||||||||||||||||
Total non-accrual loans | 5,599 | 2,961 | ||||||||||||||||||||
Past-due 90 days or more and still accruing | 203 | 250 | ||||||||||||||||||||
Total non-accrual and past-due 90 days or more and still accruing | 5,802 | 3,211 | ||||||||||||||||||||
Accruing restructured loans | 14,269 | 15,151 | ||||||||||||||||||||
Total | $ | 20,071 | 18,362 | |||||||||||||||||||
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans | 0.83 | % | 0.56 | % | ||||||||||||||||||
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans | 2.87 | % | 3.2 | % | ||||||||||||||||||
Allowance for Loan Losses and Recorded Investments in Loans | The allowance for loan losses and recorded investment in loans for the years ended December 31 were as follows (in thousands): | |||||||||||||||||||||
Commercial | Commercial, | Residential | Consumer | Agricultural | Other | Total | ||||||||||||||||
& Industrial | Secured by | Real Estate | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Provision charged to expenses | 173 | (20 | ) | 712 | 18 | 11 | 36 | 930 | ||||||||||||||
Losses charged off | (261 | ) | (573 | ) | (652 | ) | (129 | ) | — | (79 | ) | (1,694 | ) | |||||||||
Recoveries | 42 | 63 | 40 | 108 | — | 44 | 297 | |||||||||||||||
Balance, end of year | $ | 129 | 1,990 | 926 | 63 | 11 | 2 | 3,121 | ||||||||||||||
Individually evaluated for impairment | $ | 10 | 415 | 89 | — | — | — | 514 | ||||||||||||||
Collectively evaluated for impairment | 119 | 1,273 | 836 | 63 | 11 | 2 | 2,304 | |||||||||||||||
Acquired credit impaired loans | — | 302 | 1 | — | — | — | 303 | |||||||||||||||
Balance, end of year | $ | 129 | 1,990 | 926 | 63 | 11 | 2 | 3,121 | ||||||||||||||
Loans: | ||||||||||||||||||||||
Individually evaluated for impairment | $ | 401 | 13,022 | 1,701 | 55 | — | — | 15,179 | ||||||||||||||
Collectively evaluated for impairment | 33,941 | 352,774 | 249,374 | 17,954 | 11,371 | 167 | 665,581 | |||||||||||||||
Acquired credit impaired loans | 1,092 | 12,984 | 3,425 | 81 | 101 | 513 | 18,196 | |||||||||||||||
Balance, end of year | $ | 35,434 | 378,780 | 254,500 | 18,090 | 11,472 | 680 | 698,956 | ||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
Provision charged to expenses | (30 | ) | 256 | 327 | 12 | — | 23 | 588 | ||||||||||||||
Losses charged off | (119 | ) | (58 | ) | (244 | ) | (181 | ) | — | (67 | ) | (669 | ) | |||||||||
Recoveries | 4 | 26 | 31 | 127 | — | 44 | 232 | |||||||||||||||
Balance, end of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Individually evaluated for impairment | $ | 2 | 760 | 270 | — | — | — | 1,032 | ||||||||||||||
Collectively evaluated for impairment | 173 | 1,760 | 556 | 66 | — | 1 | 2,556 | |||||||||||||||
Acquired credit impaired loans | — | — | — | — | — | — | — | |||||||||||||||
Balance, end of year | $ | 175 | 2,520 | 826 | 66 | — | 1 | 3,588 | ||||||||||||||
Loans: | ||||||||||||||||||||||
Individually evaluated for impairment | $ | 165 | 14,522 | 2,132 | 27 | — | — | 16,846 | ||||||||||||||
Collectively evaluated for impairment | 28,809 | 295,028 | 212,378 | 12,703 | 2,472 | 91 | 551,481 | |||||||||||||||
Acquired credit impaired loans | 332 | 4,363 | 1,332 | — | — | — | 6,027 | |||||||||||||||
Balance, end of year | $ | 29,306 | 313,913 | 215,842 | 12,730 | 2,472 | 91 | 574,354 | ||||||||||||||
Commercial | Commercial, | Residential | Consumer | Agricultural | Other | Total | ||||||||||||||||
& Industrial | Secured by | Real Estate | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||
Balance, beginning of year | $ | 162 | 1,941 | 656 | 166 | — | 6 | 2,931 | ||||||||||||||
Change in classification | 18 | (18 | ) | — | — | — | — | — | ||||||||||||||
Provision charged to expenses | 299 | 536 | 535 | (47 | ) | — | 28 | 1,351 | ||||||||||||||
Losses charged off | (159 | ) | (234 | ) | (486 | ) | (134 | ) | — | (85 | ) | (1,098 | ) | |||||||||
Recoveries | — | 71 | 7 | 123 | — | 52 | 253 | |||||||||||||||
Balance, end of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
Individually evaluated for impairment | $ | 159 | 607 | 138 | — | — | — | 904 | ||||||||||||||
Collectively evaluated for impairment | 161 | 1,689 | 574 | 108 | — | 1 | 2,533 | |||||||||||||||
Balance, end of year | $ | 320 | 2,296 | 712 | 108 | — | 1 | 3,437 | ||||||||||||||
Analysis of the Company's Loan Portfolio by Credit Quality Indicators | An analysis of the Company’s loan portfolio by credit quality indicators at December 31 is as follows (in thousands): | |||||||||||||||||||||
Pass | OAEM | Substandard | Doubtful | Total | ||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Commercial & industrial | $ | 34,322 | — | 1,112 | — | 35,434 | ||||||||||||||||
Commercial, secured by real estate | 353,957 | 6,421 | 18,402 | — | 378,780 | |||||||||||||||||
Residential real estate | 246,335 | 920 | 7,245 | — | 254,500 | |||||||||||||||||
Consumer | 17,979 | — | 111 | — | 18,090 | |||||||||||||||||
Agricultural | 11,273 | — | 199 | — | 11,472 | |||||||||||||||||
Other | 680 | — | — | — | 680 | |||||||||||||||||
Total | $ | 664,546 | 7,341 | 27,069 | — | 698,956 | ||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Commercial & industrial | $ | 27,563 | 44 | 1,699 | — | 29,306 | ||||||||||||||||
Commercial, secured by real estate | 295,189 | 3,967 | 14,757 | — | 313,913 | |||||||||||||||||
Residential real estate | 208,881 | 1,136 | 5,825 | — | 215,842 | |||||||||||||||||
Consumer | 12,681 | — | 49 | — | 12,730 | |||||||||||||||||
Agricultural | 2,472 | — | — | — | 2,472 | |||||||||||||||||
Other | 91 | — | — | — | 91 | |||||||||||||||||
Total | $ | 546,877 | 5,147 | 22,330 | — | 574,354 | ||||||||||||||||
Loan Portfolio Aging Analysis | ||||||||||||||||||||||
Pass | OAEM | Substandard | Doubtful | Total | ||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Commercial & industrial | $ | 34,322 | — | 1,112 | — | 35,434 | ||||||||||||||||
Commercial, secured by real estate | 353,957 | 6,421 | 18,402 | — | 378,780 | |||||||||||||||||
Residential real estate | 246,335 | 920 | 7,245 | — | 254,500 | |||||||||||||||||
Consumer | 17,979 | — | 111 | — | 18,090 | |||||||||||||||||
Agricultural | 11,273 | — | 199 | — | 11,472 | |||||||||||||||||
Other | 680 | — | — | — | 680 | |||||||||||||||||
Total | $ | 664,546 | 7,341 | 27,069 | — | 698,956 | ||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Commercial & industrial | $ | 27,563 | 44 | 1,699 | — | 29,306 | ||||||||||||||||
Commercial, secured by real estate | 295,189 | 3,967 | 14,757 | — | 313,913 | |||||||||||||||||
Residential real estate | 208,881 | 1,136 | 5,825 | — | 215,842 | |||||||||||||||||
Consumer | 12,681 | — | 49 | — | 12,730 | |||||||||||||||||
Agricultural | 2,472 | — | — | — | 2,472 | |||||||||||||||||
Other | 91 | — | — | — | 91 | |||||||||||||||||
Total | $ | 546,877 | 5,147 | 22,330 | — | 574,354 | ||||||||||||||||
The Company evaluates the loan risk grading system definitions and allowance for loan loss methodology on an ongoing basis. No significant changes were made to either during the past year. | ||||||||||||||||||||||
A loan portfolio aging analysis at December 31 is as follows (in thousands): | ||||||||||||||||||||||
30-59 Days | 60-89 Days | Greater Than | Total | Current | Total Loans | Total Loans Greater Than | ||||||||||||||||
Past Due | Past Due | 90 Days | Past Due | Receivable | 90 Days and | |||||||||||||||||
Accruing | ||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
Commercial & industrial | $ | 4 | — | — | 4 | 35,430 | 35,434 | — | ||||||||||||||
Commercial, secured by real estate | 1,000 | 83 | 3,179 | 4,262 | 374,518 | 378,780 | 9 | |||||||||||||||
Residential real estate | 648 | 297 | 1,289 | 2,234 | 252,266 | 254,500 | 177 | |||||||||||||||
Consumer | 59 | 28 | 17 | 104 | 17,986 | 18,090 | 17 | |||||||||||||||
Agricultural | 73 | 70 | — | 143 | 11,329 | 11,472 | — | |||||||||||||||
Other | 106 | — | — | 106 | 574 | 680 | — | |||||||||||||||
Total | $ | 1,890 | 478 | 4,485 | 6,853 | 692,103 | 698,956 | 203 | ||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
Commercial & industrial | $ | 277 | — | 144 | 421 | 28,885 | 29,306 | — | ||||||||||||||
Commercial, secured by real estate | 951 | 582 | 1,174 | 2,707 | 311,206 | 313,913 | — | |||||||||||||||
Residential real estate | 1,131 | 299 | 1,604 | 3,034 | 212,808 | 215,842 | 236 | |||||||||||||||
Consumer | 38 | 35 | 13 | 86 | 12,644 | 12,730 | 14 | |||||||||||||||
Agricultural | — | — | — | — | 2,472 | 2,472 | — | |||||||||||||||
Other | 91 | — | — | 91 | — | 91 | — | |||||||||||||||
Total | $ | 2,488 | 916 | 2,935 | 6,339 | 568,015 | 574,354 | 250 | ||||||||||||||
Impaired Loans | Impaired loans for the years ended December 31 were as follows (in thousands): | |||||||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 1,092 | 2,077 | — | 1,823 | 161 | ||||||||||||||||
Commercial, secured by real estate | 21,987 | 26,715 | — | 23,360 | 1,373 | |||||||||||||||||
Residential real estate | 4,074 | 5,549 | — | 4,645 | 379 | |||||||||||||||||
Consumer | 117 | 178 | — | 179 | 14 | |||||||||||||||||
Agricultural | 101 | 619 | — | 121 | 20 | |||||||||||||||||
Other | 513 | 744 | — | 550 | 43 | |||||||||||||||||
Total | $ | 27,884 | 35,882 | — | 30,678 | 1,990 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 401 | 406 | 10 | 319 | 19 | ||||||||||||||||
Commercial, secured by real estate | 4,019 | 4,538 | 717 | 4,108 | 117 | |||||||||||||||||
Residential real estate | 1,052 | 1,265 | 90 | 1,026 | 44 | |||||||||||||||||
Consumer | 19 | 20 | — | 18 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||
Total | $ | 5,491 | 6,229 | 817 | 5,471 | 182 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 1,493 | 2,483 | 10 | 2,142 | 180 | ||||||||||||||||
Commercial, secured by real estate | 26,006 | 31,253 | 717 | 27,468 | 1,490 | |||||||||||||||||
Residential real estate | 5,126 | 6,814 | 90 | 5,671 | 423 | |||||||||||||||||
Consumer | 136 | 198 | — | 197 | 16 | |||||||||||||||||
Agricultural | 101 | 619 | — | 121 | 20 | |||||||||||||||||
Other | 513 | 744 | — | 550 | 43 | |||||||||||||||||
Total | $ | 33,375 | 42,111 | 817 | 36,149 | 2,172 | ||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 332 | 531 | — | 700 | 35 | ||||||||||||||||
Commercial, secured by real estate | 10,883 | 12,317 | — | 11,612 | 748 | |||||||||||||||||
Residential real estate | 2,096 | 2,967 | — | 2,345 | 182 | |||||||||||||||||
Consumer | — | — | — | 7 | — | |||||||||||||||||
Agricultural | — | — | — | 13 | 6 | |||||||||||||||||
Total | $ | 13,311 | 15,815 | — | 14,677 | 971 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 165 | 270 | 2 | 186 | 2 | ||||||||||||||||
Commercial, secured by real estate | 7,725 | 7,725 | 760 | 7,368 | 252 | |||||||||||||||||
Residential real estate | 1,645 | 1,663 | 270 | 1,123 | 44 | |||||||||||||||||
Consumer | 27 | 27 | — | 17 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 9,562 | 9,685 | 1,032 | 8,694 | 300 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 497 | 801 | 2 | 886 | 37 | ||||||||||||||||
Commercial, secured by real estate | 18,608 | 20,042 | 760 | 18,980 | 1,000 | |||||||||||||||||
Residential real estate | 3,741 | 4,630 | 270 | 3,468 | 226 | |||||||||||||||||
Consumer | 27 | 27 | — | 24 | 2 | |||||||||||||||||
Agricultural | — | — | — | 13 | 6 | |||||||||||||||||
Total | $ | 22,873 | 25,500 | 1,032 | 23,371 | 1,271 | ||||||||||||||||
Recorded | Unpaid | Related | Average | Interest | ||||||||||||||||||
Investment | Principal | Allowance | Recorded | Income | ||||||||||||||||||
Balance | Investment | Recognized | ||||||||||||||||||||
31-Dec-12 | ||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | — | — | — | 975 | 43 | ||||||||||||||||
Commercial, secured by real estate | 9,541 | 9,936 | — | 9,310 | 350 | |||||||||||||||||
Residential real estate | 417 | 417 | — | 397 | 5 | |||||||||||||||||
Consumer | 20 | 20 | — | 23 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 9,978 | 10,373 | — | 10,705 | 400 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||
Commercial & industrial | $ | 264 | 822 | 159 | 374 | — | ||||||||||||||||
Commercial, secured by real estate | 4,258 | 4,360 | 660 | 4,765 | 171 | |||||||||||||||||
Residential real estate | 658 | 853 | 85 | 707 | 2 | |||||||||||||||||
Consumer | — | — | — | 4 | — | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 5,180 | 6,035 | 904 | 5,850 | 173 | ||||||||||||||||
Total: | ||||||||||||||||||||||
Commercial & industrial | $ | 264 | 822 | 159 | 1,349 | 43 | ||||||||||||||||
Commercial, secured by real estate | 13,799 | 14,296 | 660 | 14,075 | 521 | |||||||||||||||||
Residential real estate | 1,075 | 1,270 | 85 | 1,104 | 7 | |||||||||||||||||
Consumer | 20 | 20 | — | 27 | 2 | |||||||||||||||||
Agricultural | — | — | — | — | — | |||||||||||||||||
Total | $ | 15,158 | 16,408 | 904 | 16,555 | 573 | ||||||||||||||||
Loan Modification that were Classified as Troubled Debt Restructuring | Loan modifications that were classified as troubled debt restructurings during the years ended December 31 were as follows (dollars in thousands): | |||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Number | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | Number | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | |||||||||||||||||
of Loans | of Loans | |||||||||||||||||||||
Commercial and industrial | 8 | $ | 658 | $ | 340 | 1 | $ | 22 | $ | 22 | ||||||||||||
Commercial, secured by real estate | 2 | 896 | 1,214 | 3 | 1,594 | 1,594 | ||||||||||||||||
Residential real estate | 2 | 82 | 82 | 6 | 508 | 508 | ||||||||||||||||
Consumer | 3 | 40 | 40 | 2 | 27 | 27 | ||||||||||||||||
15 | $ | 1,676 | $ | 1,676 | 12 | $ | 2,151 | $ | 2,151 | |||||||||||||
Schedule of Activity in the Mortgage Servicing Rights Portfolio | Activity in the mortgage servicing rights portfolio during the years ended December 31 was as follows (in thousands): | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Balance, beginning of year | $ | 498 | 475 | 418 | ||||||||||||||||||
Amount capitalized to mortgage servicing rights | 292 | 191 | 283 | |||||||||||||||||||
Amortization of mortgage servicing rights | (199 | ) | (168 | ) | (226 | ) | ||||||||||||||||
Balance, end of year | $ | 591 | 498 | 475 | ||||||||||||||||||
ACQUIRED_CREDIT_IMPAIRED_LOANS1
ACQUIRED CREDIT IMPAIRED LOANS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquired Credit Impaired Loans [Abstract] | ||||||||
Schedule of carrying values of certain loans acquired in a transfer | The following table provides, as of December 31, the major classifications of loans acquired during 2014 and 2013 that are accounted for in accordance with FASB ASC 310-30 (in thousands): | |||||||
2014 | 2013 | |||||||
Commercial & industrial | $ | 1,092 | 332 | |||||
Commercial, secured by real estate | 12,984 | 4,363 | ||||||
Residential real estate | 3,425 | 1,332 | ||||||
Consumer | 81 | — | ||||||
Agricultural | 101 | — | ||||||
Other loans, including deposit overdrafts | 513 | — | ||||||
18,196 | 6,027 | |||||||
Less allowance for loan losses | 303 | — | ||||||
Loans, net | $ | 17,893 | 6,027 | |||||
Outstanding and related carrying amount for acquired impaired loans | The following table provides the outstanding balance and related carrying amount for acquired impaired loans at December 31 (in thousands): | |||||||
2014 | 2013 | |||||||
Outstanding balance | $ | 26,697 | 8,220 | |||||
Carrying amount | 18,196 | 6,027 | ||||||
Accretable discount related to acquired impaired loans | Activity during 2014 for the accretable discount related to acquired impaired loans is as follows (in thousands): | |||||||
2014 | 2013 | |||||||
Accretable discount, beginning of year | $ | 1,107 | — | |||||
Accretable discount acquired during period | 2,163 | 1,389 | ||||||
Reclass from nonaccretable discount to accretable discount | 177 | 157 | ||||||
Less disposals | (249 | ) | (23 | ) | ||||
Less accretion | (524 | ) | (416 | ) | ||||
Accretable discount, end of year | $ | 2,674 | $ | 1,107 | ||||
OTHER_REAL_ESTATE_OWNED_Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Real Estate [Abstract] | |||||||
Changes in Other Real Estate Owned | Changes in other real estate owned were as follows (in thousands): | ||||||
2014 | 2013 | ||||||
Balance, beginning of year | $ | 1,463 | 2,189 | ||||
Additions | 480 | 133 | |||||
Additions due to merger | 262 | 127 | |||||
Reductions due to sales | (735 | ) | (909 | ) | |||
Reductions due to valuation write downs | (100 | ) | (77 | ) | |||
Balance, end of year | $ | 1,370 | 1,463 | ||||
Components of Other Real Estate Owned | Other real estate owned at December 31 consisted of (in thousands): | ||||||
2014 | 2013 | ||||||
Commercial real estate | $ | 1,265 | 1,415 | ||||
Residential real estate | 105 | 48 | |||||
$ | 1,370 | 1,463 | |||||
PREMISES_AND_EQUIPMENT_Tables
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Property, Plant and Equipment [Abstract] | |||||||
Premises and Equipment | Premises and equipment at December 31 are summarized as follows (in thousands): | ||||||
2014 | 2013 | ||||||
Land | $ | 6,045 | 5,354 | ||||
Buildings | 19,728 | 18,778 | |||||
Equipment | 12,627 | 12,172 | |||||
Construction in progress | 49 | — | |||||
Total | 38,449 | 36,304 | |||||
Less accumulated depreciation | 17,716 | 16,407 | |||||
Premises and equipment, net | $ | 20,733 | 19,897 | ||||
LEASES_Tables
LEASES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases [Abstract] | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum annual rentals for each of the years 2015 through 2019 and thereafter for non-cancelable leases having terms in excess of one year are as follows (in thousands): | |||
2015 | $ | 473 | ||
2016 | 406 | |||
2017 | 285 | |||
2018 | 198 | |||
2019 | 155 | |||
Thereafter | 3,869 | |||
Total | $ | 5,386 | ||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||
Schedule of Goodwill | Changes in goodwill during 2014 and 2013 were as follows (in thousands): | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Balance, beginning of year | $ | 14,186 | 5,915 | ||||||||||||||||
Additions from acquisitions | 13,452 | 8,271 | |||||||||||||||||
Balance, end of year | $ | 27,638 | 14,186 | ||||||||||||||||
Schedule of Other Intangible Assets Included in Other Assets | Other intangible assets in the consolidated balance sheets at December 31, 2014 and 2013 were as follows (in thousands): | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||
Intangible | Amortization | Intangible | Intangible | Amortization | Intangible | ||||||||||||||
Assets | Assets | Assets | Assets | ||||||||||||||||
Core deposit intangibles | $ | 5,040 | 851 | 4,189 | 2,917 | 620 | 2,297 | ||||||||||||
Mortgage servicing rights | 1,418 | 827 | 591 | 1,126 | 628 | 498 | |||||||||||||
Total | $ | 6,458 | 1,678 | 4,780 | 4,043 | 1,248 | 2,795 | ||||||||||||
Estimated Aggregate Future Amortization Expense | The estimated aggregate future amortization expense for each of the next five years for intangible assets remaining as of December 31, 2014 is as follows (in thousands): | ||||||||||||||||||
2015 | $ | 747 | |||||||||||||||||
2016 | 721 | ||||||||||||||||||
2017 | 697 | ||||||||||||||||||
2018 | 677 | ||||||||||||||||||
2019 | 661 | ||||||||||||||||||
CERTIFICATES_OF_DEPOSIT_Tables
CERTIFICATES OF DEPOSIT (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Time Deposits [Abstract] | ||||
Contractual Maturities of Time Deposits | Contractual maturities of time deposits at December 31, 2014 were as follows (in thousands): | |||
2015 | $ | 102,283 | ||
2016 | 48,294 | |||
2017 | 12,418 | |||
2018 | 17,908 | |||
2019 | 26,887 | |||
Thereafter | 6,345 | |||
$ | 214,135 | |||
BORROWINGS_Tables
BORROWINGS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||
Summary of funds borrowed from Federal Home Loan Bank | Funds borrowed from the FHLB at December 31 are as follows (dollars in thousands): | |||||||||||||
Current | 2014 | 2013 | ||||||||||||
Interest | ||||||||||||||
Rate | ||||||||||||||
Fixed Rate Advances, due at maturity: | ||||||||||||||
Advance due January 2015 | 2 | % | $ | 5,000 | 5,000 | |||||||||
Advance due March 2017 | 5.25 | % | 5,000 | 5,000 | ||||||||||
Fixed Rate Advances, with monthly principal and interest payments: | ||||||||||||||
Advance due March 2014 | 2.45 | % | — | 265 | ||||||||||
Advance due March 2019 | 2.82 | % | 1,357 | 1,837 | ||||||||||
$ | 11,357 | 12,102 | ||||||||||||
Short-term borrowings | Short-term borrowings at December 31 are as follows (dollars in thousands): | |||||||||||||
2014 | 2013 | |||||||||||||
Amount | Rate | Amount | Rate | |||||||||||
Line of credit | $ | 5,021 | 0.75 | % | $ | — | — | % | ||||||
Repurchase agreements | 11,624 | 0.1 | % | 8,655 | 0.1 | % | ||||||||
$ | 16,645 | 0.3 | % | $ | 8,655 | 0.1 | % | |||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Tax Disclosure [Abstract] | ||||||||||
Provision for Federal Income Taxes | The provision for federal income taxes consists of (in thousands): | |||||||||
2014 | 2013 | 2012 | ||||||||
Income taxes currently payable | $ | 3,194 | 2,750 | 2,764 | ||||||
Deferred income tax provision (benefit) | 192 | 192 | 31 | |||||||
Provision for income taxes | $ | 3,386 | 2,942 | 2,795 | ||||||
Reconciliation Between Statutory Income Tax and Effective Tax Rate | A reconciliation between the statutory income tax and the Company's effective tax rate follows: | |||||||||
2014 | 2013 | 2012 | ||||||||
Statutory tax rate | 34 | % | 34 | % | 34 | % | ||||
Increase (decrease) resulting from - | ||||||||||
Tax exempt interest | (6.8 | )% | (7.2 | )% | (7.2 | )% | ||||
Tax exempt income on bank owned life insurance | (1.7 | )% | (2.0 | )% | (1.8 | )% | ||||
Other – net | — | % | 0.3 | % | 0.3 | % | ||||
Effective tax rate | 25.5 | % | 25.1 | % | 25.3 | % | ||||
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities at December 31 consist of the following (in thousands): | |||||||||
2014 | 2013 | |||||||||
Deferred tax assets: | ||||||||||
Allowance for loan losses | $ | 1,061 | 1,148 | |||||||
Net unrealized losses on investment securities available-for-sale | 470 | 846 | ||||||||
Fair value adjustment on loans acquired from merger with First Capital | 847 | 1,184 | ||||||||
Write-down of other real estate owned | 196 | 196 | ||||||||
Pension and deferred compensation | 849 | 1,304 | ||||||||
Other | 274 | 107 | ||||||||
3,697 | 4,785 | |||||||||
Deferred tax liabilities: | ||||||||||
Depreciation of premises and equipment | (1,280 | ) | (1,408 | ) | ||||||
Amortization of intangibles | (840 | ) | (950 | ) | ||||||
Deferred loan fees | (3 | ) | — | |||||||
FHLB stock dividends | (349 | ) | (345 | ) | ||||||
Fair value adjustment on securities acquired from merger with First Capital | (70 | ) | (143 | ) | ||||||
(2,542 | ) | (2,846 | ) | |||||||
Net deferred tax assets (liabilities) | $ | 1,155 | $ | 1,939 | ||||||
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Financial Instruments Whose Contract Amounts Represent Off-Balance-Sheet Credit Risk | Financial instruments whose contract amounts represent off-balance-sheet credit risk at December 31 were as follows (in thousands): | ||||||
2014 | 2013 | ||||||
Commitments to extend credit: | |||||||
Commercial loans | $ | 5,152 | 9,316 | ||||
Other loans: | |||||||
Fixed rate | 877 | 852 | |||||
Adjustable rate | 2,011 | 1,653 | |||||
Unused lines of credit: | |||||||
Fixed rate | 6,496 | 3,404 | |||||
Adjustable rate | 67,981 | 60,236 | |||||
Unused overdraft protection amounts on demand and NOW accounts | 10,206 | 9,494 | |||||
Standby letters of credit | 563 | 365 | |||||
$ | 93,286 | 85,320 | |||||
REGULATORY_MATTERS_Tables
REGULATORY MATTERS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Banking and Thrift [Abstract] | |||||||||||||
Financial institutions are classified into categories based upon capital adequacy | Minimum capital requirements and capital levels needed to be considered well-capitalized at December 31, 2014 and 2013 are: | ||||||||||||
Minimum | To Be Considered | ||||||||||||
Requirement | Well-Capitalized | ||||||||||||
Ratio of tier 1 capital to risk-weighted assets | 4.00% | 6.00% | |||||||||||
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 8.00% | 10.00% | |||||||||||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 3.00% | 5.00% | |||||||||||
Summary of regulatory capital and capital ratios of LCNB | A summary of the regulatory capital of the Consolidated Company and Bank at December 31 follows (dollars in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
Consolidated | Bank | Consolidated | Bank | ||||||||||
Company | Company | ||||||||||||
Regulatory Capital: | |||||||||||||
Shareholders' equity | $ | 125,695 | 119,350 | 118,873 | 90,438 | ||||||||
Goodwill and other intangible assets | (31,886 | ) | (31,886 | ) | (16,532 | ) | (16,532 | ) | |||||
Accumulated other comprehensive (income) loss | (785 | ) | (583 | ) | 1,722 | 1,856 | |||||||
Tier 1 risk-based capital | 93,024 | 86,881 | 104,063 | 75,762 | |||||||||
Eligible allowance for loan losses | 3,121 | 3,121 | 3,588 | 3,588 | |||||||||
Total risk-based capital | $ | 96,145 | 90,002 | 107,651 | 79,350 | ||||||||
Capital Ratios: | |||||||||||||
Tier 1 capital to risk-weighted assets | 13.92 | % | 13.03 | % | 18.03 | % | 13.18 | % | |||||
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 14.38 | % | 13.5 | % | 18.65 | % | 13.81 | % | |||||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 8.53 | % | 7.98 | % | 11.1 | % | 8.1 | % |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) for 2014 and 2013 are as follows (in thousands): | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Unrealized Gains and Losses on Available-for-Sale Securities | Changes in Pension Plan Assets and Benefit Obligations | Total | Unrealized Gains and Losses on Available-for-Sale Securities | Changes in Pension Plan Assets and Benefit Obligations | Total | ||||||||||||||
Balance at beginning of year | $ | (1,641 | ) | (81 | ) | (1,722 | ) | 4,875 | (154 | ) | 4,721 | ||||||||
Before reclassifications | 2,865 | (260 | ) | 2,605 | (5,706 | ) | 73 | (5,633 | ) | ||||||||||
Reclassifications | (98 | ) | — | (98 | ) | (810 | ) | — | (810 | ) | |||||||||
Balance at end of year | $ | 1,126 | (341 | ) | 785 | (1,641 | ) | (81 | ) | (1,722 | ) | ||||||||
Reclassification Out Of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive income (loss) during 2014 and 2013 and the affected line items in the consolidated statements of income are as follows (in thousands): | ||||||||||||||||||
2014 | 2013 | Affected Line Item in the Consolidated Statements of Income | |||||||||||||||||
Realized gain on sales of securities | $ | 149 | 1,060 | Net gain on sale of securities | |||||||||||||||
Adjustment for change in unrealized gain between sale date and previous quarter-end | — | 168 | Not applicable | ||||||||||||||||
149 | 1,228 | ||||||||||||||||||
Less provision for income taxes | 51 | 418 | Provision for income taxes | ||||||||||||||||
Reclassification adjustment, net of taxes | $ | 98 | 810 | ||||||||||||||||
RETIREMENT_PLANS_Tables
RETIREMENT PLANS (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||
Summary of Costs of Retirement Plans | Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and 401(k) plan charged to salaries and employee benefits in the consolidated statements of income for the years ended December 31 were as follows (in thousands): | |||||||||
2014 | 2013 | 2012 | ||||||||
Qualified noncontributory defined benefit retirement plan | $ | 967 | 486 | 355 | ||||||
401(k) plan | 326 | 294 | 275 | |||||||
Components of Net Benefit Costs | The components of net periodic pension cost of the nonqualified defined benefit retirement plan for the years ended December 31 are summarized as follows (in thousands): | |||||||||
2014 | 2013 | 2012 | ||||||||
Service cost | $ | 68 | 71 | 89 | ||||||
Interest cost | 60 | 46 | 43 | |||||||
Amortization of unrecognized (gain) loss | — | 25 | 20 | |||||||
Amortization of unrecognized prior service cost | 15 | 29 | 29 | |||||||
Net periodic pension cost | $ | 143 | 171 | 181 | ||||||
Reconciliation of Changes in Projected Benefit Obligations | A reconciliation of changes in the projected benefit obligation of the nonqualified defined benefit retirement plan at December 31 follows (in thousands): | |||||||||
2014 | 2013 | 2012 | ||||||||
Projected benefit obligation at beginning of year | $ | 1,213 | 1,153 | 969 | ||||||
Service cost | 68 | 71 | 89 | |||||||
Interest cost | 60 | 46 | 43 | |||||||
Actuarial (gain) or loss | 407 | (57 | ) | 52 | ||||||
Benefits paid | (7 | ) | — | — | ||||||
Projected benefit obligation at end of year | $ | 1,741 | 1,213 | 1,153 | ||||||
Amount Recognized in OCI | Amounts recognized in accumulated other comprehensive income, net of tax, at December 31 for the nonqualified defined benefit retirement plan consists of (in thousands): | |||||||||
2014 | 2013 | 2012 | ||||||||
Net actuarial (gain)/loss | $ | 339 | 70 | 125 | ||||||
Past service cost | — | 10 | 29 | |||||||
$ | 339 | 80 | 154 | |||||||
Schedule of Key Assumptions Used | Key weighted-average assumptions used to determine the benefit obligation and net periodic pension costs for the nonqualified defined benefit retirement plan for the years ended December 31 were as follows: | |||||||||
2014 | 2013 | 2012 | ||||||||
Benefit obligation: | ||||||||||
Discount rate | 3.95 | % | 4.95 | % | 4.05 | % | ||||
Salary increase rate | 2 | % | 3 | % | 3 | % | ||||
Net periodic pension cost: | ||||||||||
Discount rate | 4.95 | % | 4.05 | % | 4.4 | % | ||||
Salary increase rate | 3 | % | 3 | % | 3 | % | ||||
Amortization period in years | 3.95 | 2.99 | 3 | |||||||
Expected Benefit Payments | Estimated future benefit payments reflecting expected future service for the years ended after December 31, 2014 are (in thousands): | |||||||||
2015 | $ | 68 | ||||||||
2016 | 73 | |||||||||
2017 | 127 | |||||||||
2018 | 126 | |||||||||
2019 | 126 | |||||||||
2020-2023 | 626 | |||||||||
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Stock Options, by Exercise Price Range | Stock options outstanding at December 31, 2014 were as follows: | ||||||||||||||||||
Outstanding Stock Options | Exercisable Stock Options | ||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
Exercise | Exercise | Remaining | Exercise | Remaining | |||||||||||||||
Price Range | Number | Price | Contractual | Number | Price | Contractual | |||||||||||||
Life (Years) | Life (Years) | ||||||||||||||||||
$9.00 - 10.99 | 23,494 | $ | 9 | 4.1 | 23,494 | $ | 9 | 4.1 | |||||||||||
$11.00 - 12.99 | 63,354 | 12.05 | 5.5 | 43,453 | 12.04 | 5.2 | |||||||||||||
$17.00 - 18.99 | 12,962 | 18.41 | 1.6 | 12,962 | 18.41 | 1.6 | |||||||||||||
99,810 | 12.16 | 4.7 | 79,909 | 12.18 | 4.3 | ||||||||||||||
Summary of Stock Option Activity | The following table summarizes stock option activity for 2014: | ||||||||||||||||||
Weighted | |||||||||||||||||||
Average | |||||||||||||||||||
Options | Exercise | ||||||||||||||||||
Price | |||||||||||||||||||
Outstanding at December 31, 2013 | 104,966 | $ | 12.43 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Exercised or canceled | — | — | |||||||||||||||||
Expired | (5,156 | ) | 17.66 | ||||||||||||||||
Outstanding at December 31, 2014 | 99,810 | 12.16 | |||||||||||||||||
Exercisable at December 31, 2014 | 79,909 | 12.18 | |||||||||||||||||
Estimated Valuation Assumptions | The following table shows the estimated weighted-average fair value of options granted and the assumptions used in calculating that value for the year indicated: | ||||||||||||||||||
2012 | |||||||||||||||||||
Estimated weighted-average fair value of options granted | $ | 2.8 | |||||||||||||||||
Risk-free interest rate | 0.84 | % | |||||||||||||||||
Average dividend | $ | 0.64 | |||||||||||||||||
Volatility factor of the expected market price of the Company's common stock | 39.56 | % | |||||||||||||||||
Average life in years | 6.5 | ||||||||||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Earnings Per Share [Abstract] | ||||||||||
Computations of Earnings Per Share | Earnings per share for the years ended December 31 were calculated as follows (in thousands, except share and per share data): | |||||||||
2014 | 2013 | 2012 | ||||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Weighted average number of shares outstanding used in the calculation of basic earnings per common share | 9,297,019 | 7,852,514 | 6,717,357 | |||||||
Add dilutive effect of: | ||||||||||
Stock options | 18,545 | 23,456 | 19,205 | |||||||
Stock warrants | 90,782 | 107,027 | 65,913 | |||||||
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share | 9,406,346 | 7,982,997 | 6,802,475 | |||||||
Earnings per common share: | ||||||||||
Basic | $ | 1.06 | 1.12 | 1.23 | ||||||
Diluted | 1.05 | 1.1 | 1.22 | |||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions [Abstract] | |||||||
Schedule of Related Party Transactions | The following table provides a summary of the loan activity for these officers and directors for the years ended December 31 (in thousands): | ||||||
2014 | 2013 | ||||||
Beginning balance | $ | 1,001 | 1,108 | ||||
Additions | 594 | 217 | |||||
Reductions | (403 | ) | (324 | ) | |||
Ending Balance | $ | 1,192 | 1,001 | ||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
Summary of Valuation of LCNB's Assets Recorded at Fair Value by Inputs Level | The following table summarizes the valuation of LCNB’s assets recorded at fair value by input levels as of December 31 (in thousands): | |||||||||||||||||
Fair Value Measurements at the End of | ||||||||||||||||||
the Reporting Period Using | ||||||||||||||||||
Fair Value | Quoted | Significant | Significant | |||||||||||||||
Measurements | Prices | Other | Unobservable | |||||||||||||||
in Active | Observable | Inputs | ||||||||||||||||
Markets for | Inputs | (Level 3) | ||||||||||||||||
Identical | (Level 2) | |||||||||||||||||
Assets | ||||||||||||||||||
(Level 1) | ||||||||||||||||||
December 31, 2014 | ||||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||
U.S. Treasury notes | $ | 62,560 | 62,560 | — | — | |||||||||||||
U.S. Agency notes | 83,637 | — | 83,637 | — | ||||||||||||||
U.S. Agency mortgage-backed securities | 38,032 | — | 38,032 | — | ||||||||||||||
Certificates of deposit | 3,086 | — | 3,086 | — | ||||||||||||||
Municipal securities: | ||||||||||||||||||
Non-taxable | 77,395 | — | 77,395 | — | ||||||||||||||
Taxable | 16,395 | — | 16,395 | — | ||||||||||||||
Mutual funds | 2,461 | 1,461 | 1,000 | — | ||||||||||||||
Trust preferred securities | 50 | 50 | — | — | ||||||||||||||
Equity securities | 1,749 | 1,749 | — | — | ||||||||||||||
Total recurring fair value measurements | $ | 285,365 | 65,820 | 219,545 | — | |||||||||||||
Nonrecurring fair value measurements: | ||||||||||||||||||
Impaired loans | $ | 4,872 | — | — | 4,872 | |||||||||||||
Other real estate owned and repossessed assets | 1,370 | — | — | 1,370 | ||||||||||||||
Total nonrecurring fair value measurements | $ | 6,242 | — | — | 6,242 | |||||||||||||
December 31, 2013 | ||||||||||||||||||
Recurring fair value measurement: | ||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||
U.S. Treasury notes | $ | 12,894 | 12,894 | — | — | |||||||||||||
U.S. Agency notes | 106,675 | — | 106,675 | — | ||||||||||||||
U.S. Agency mortgage-backed securities | 40,309 | — | 40,309 | — | ||||||||||||||
Certificates of deposit with other banks | 1,501 | — | 1,501 | — | ||||||||||||||
Municipal securities: | ||||||||||||||||||
Non-taxable | 75,333 | — | 75,333 | — | ||||||||||||||
Taxable | 17,309 | — | 17,309 | — | ||||||||||||||
Mutual funds | 2,380 | 1,380 | 1,000 | — | ||||||||||||||
Trust preferred securities | 147 | 147 | — | — | ||||||||||||||
Equity securities | 1,693 | 1,693 | — | — | ||||||||||||||
Total recurring fair value measurements | $ | 258,241 | 16,114 | 242,127 | — | |||||||||||||
Nonrecurring fair value measurements: | ||||||||||||||||||
Impaired loans | $ | 8,530 | — | 773 | 7,757 | |||||||||||||
Other real estate owned and repossessed assets | 1,463 | — | 1,463 | — | ||||||||||||||
Total nonrecurring fair value measurements | $ | 9,993 | — | 2,236 | 7,757 | |||||||||||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | The following table presents quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements at December 31, 2014 and 2013 (dollars in thousands): | |||||||||||||||||
Range | ||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Inputs | High | Low | Weighted Average | |||||||||||||
2014 | ||||||||||||||||||
Impaired loans | $ | 4,872 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | |||||||||||||
Discounted cash flows | Discount rate | 10.5 | % | 4 | % | 5.36 | % | |||||||||||
Other real estate owned | 1,370 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | ||||||||||||||
2013 | ||||||||||||||||||
Impaired loans | $ | 7,757 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | |||||||||||||
Carrying Amounts and Estimated Fair Values of Financial Instruments | Carrying amounts and estimated fair values of financial instruments as of December 31 were as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at the End of | ||||||||||||||||||
the Reporting Period Using | ||||||||||||||||||
Carrying | Fair | Quoted | Significant Other | Significant | ||||||||||||||
Amount | Value | Prices | Observable | Unobservable | ||||||||||||||
in Active | Inputs | Inputs | ||||||||||||||||
Markets for | (Level 2) | (Level 3) | ||||||||||||||||
Identical | ||||||||||||||||||
Assets | ||||||||||||||||||
(Level 1) | ||||||||||||||||||
2014 | ||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||
Cash and cash equivalents | $ | 15,845 | 15,845 | 15,845 | ||||||||||||||
Investment securities, held-to-maturity | 22,725 | 22,138 | 22,138 | |||||||||||||||
Federal Reserve Bank stock | 2,346 | 2,346 | 2,346 | |||||||||||||||
Federal Home Loan Bank stock | 3,638 | 3,638 | 3,638 | |||||||||||||||
Loans, net | 695,835 | 699,715 | 699,715 | |||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||
Deposits | 946,205 | 947,541 | 731,766 | 215,775 | ||||||||||||||
Short-term borrowings | 16,645 | 16,645 | 16,645 | |||||||||||||||
Long-term debt | 11,357 | 11,944 | 11,944 | |||||||||||||||
2013 | ||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||
Cash and cash equivalents | $ | 14,688 | 14,688 | 14,688 | ||||||||||||||
Investment securities, held-to-maturity | 16,323 | 16,196 | 16,196 | |||||||||||||||
Federal Reserve Bank stock | 1,603 | 1,603 | 1,603 | |||||||||||||||
Federal Home Loan Bank stock | 2,854 | 2,854 | 2,854 | |||||||||||||||
Loans, net | 570,766 | 573,163 | 773 | 572,390 | ||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||
Deposits | 785,761 | 788,096 | 599,838 | 188,258 | ||||||||||||||
Short-term borrowings | 8,655 | 8,655 | 8,655 | |||||||||||||||
Long-term debt | 12,102 | 12,842 | 12,842 | |||||||||||||||
QUARTERLY_RESULTS_OF_OPERATION1
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Schedule of Quarterly Financial Information | The following table sets forth certain quarterly results for the years ended December 31, 2014 and 2013 (dollars in thousands, except per share data): | ||||||||||||
Three Months Ended | |||||||||||||
31-Mar | 30-Jun | Sep. 30 | Dec. 31 | ||||||||||
2014 | |||||||||||||
Interest income | $ | 9,278 | 9,926 | 9,906 | 10,367 | ||||||||
Interest expense | 915 | 920 | 911 | 844 | |||||||||
Net interest income | 8,363 | 9,006 | 8,995 | 9,523 | |||||||||
Provision for loan losses | 81 | 255 | 401 | 193 | |||||||||
Net interest income after provision | 8,282 | 8,751 | 8,594 | 9,330 | |||||||||
Total non-interest income | 2,077 | 2,301 | 2,315 | 2,449 | |||||||||
Total non-interest expenses | 8,672 | 7,600 | 7,238 | 7,334 | |||||||||
Income before income taxes | 1,687 | 3,452 | 3,671 | 4,445 | |||||||||
Provision for income taxes | 364 | 841 | 953 | 1,228 | |||||||||
Net income | $ | 1,323 | 2,611 | 2,718 | 3,217 | ||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.14 | 0.28 | 0.3 | 0.34 | ||||||||
Diluted | 0.14 | 0.28 | 0.29 | 0.34 | |||||||||
2013 | |||||||||||||
Interest income | $ | 8,076 | 8,405 | 8,450 | 8,566 | ||||||||
Interest expense | 1,098 | 1,045 | 995 | 927 | |||||||||
Net interest income | 6,978 | 7,360 | 7,455 | 7,639 | |||||||||
Provision for loan losses | 149 | 42 | 178 | 219 | |||||||||
Net interest income after provision | 6,829 | 7,318 | 7,277 | 7,420 | |||||||||
Total non-interest income | 2,507 | 2,178 | 2,047 | 2,358 | |||||||||
Total non-interest expenses | 7,091 | 6,324 | 6,163 | 6,634 | |||||||||
Income before income taxes | 2,245 | 3,172 | 3,161 | 3,144 | |||||||||
Provision for income taxes | 517 | 824 | 804 | 797 | |||||||||
Net income | $ | 1,728 | 2,348 | 2,357 | 2,347 | ||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.23 | 0.31 | 0.31 | 0.27 | ||||||||
Diluted | 0.23 | 0.3 | 0.3 | 0.27 | |||||||||
PARENT_COMPANY_FINANCIAL_INFOR1
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||
Condensed Balance Sheets | ||||||||||
Condensed Balance Sheets: | ||||||||||
December 31, | 2014 | 2013 | ||||||||
Assets: | ||||||||||
Cash on deposit with subsidiary | $ | 3,985 | 26,493 | |||||||
Investment securities available-for-sale, at fair value | 1,970 | 2,019 | ||||||||
Investment in subsidiary | 119,350 | 90,437 | ||||||||
Other assets | 419 | 33 | ||||||||
Total assets | $ | 125,724 | 118,982 | |||||||
Liabilities | $ | 29 | 109 | |||||||
Shareholders' equity | 125,695 | 118,873 | ||||||||
Total liabilities and shareholders' equity | $ | 125,724 | 118,982 | |||||||
Condensed Statements of Income | ||||||||||
Condensed Statements of Income | ||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | |||||||
Income: | ||||||||||
Dividends from subsidiaries | $ | 8,800 | 10,525 | 3,800 | ||||||
Interest and dividends | 91 | 89 | 110 | |||||||
Net gain on sales of securities | 10 | 124 | 63 | |||||||
Total income | 8,901 | 10,738 | 3,973 | |||||||
Total expenses | 1,077 | 127 | 107 | |||||||
Income before income tax expense/benefit and equity in undistributed income of subsidiaries | 7,824 | 10,611 | 3,866 | |||||||
Income tax (expense) benefit | 350 | (12 | ) | (1 | ) | |||||
Equity in undistributed income (loss) of subsidiaries | 1,695 | (1,819 | ) | 4,405 | ||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Condensed Statements of Cash Flows | ||||||||||
Condensed Statements of Cash Flows | ||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 9,869 | 8,780 | 8,270 | ||||||
Adjustments for non-cash items - | ||||||||||
(Increase) decrease in undistributed income of subsidiaries | (1,695 | ) | 1,819 | (4,405 | ) | |||||
Other, net | (474 | ) | 7 | (403 | ) | |||||
Net cash flows from operating activities | 7,700 | 10,606 | 3,462 | |||||||
Cash flows from investing activities: | ||||||||||
Purchases of securities available-for-sale | (107 | ) | (563 | ) | (872 | ) | ||||
Proceeds from sales of available-for-sale securities | 227 | 569 | 3,384 | |||||||
Cash paid for business acquisition | (24,750 | ) | (7,815 | ) | — | |||||
Net cash flows from (used in) investing activities | (24,630 | ) | (7,809 | ) | 2,512 | |||||
Cash flows from financing activities: | ||||||||||
Principal payments on long-term debt | — | (1,792 | ) | — | ||||||
Proceeds from issuance of common stock | 372 | 27,238 | 333 | |||||||
Cash dividends paid on common stock | (5,950 | ) | (5,148 | ) | (4,299 | ) | ||||
Other | — | 70 | 28 | |||||||
Net cash flows from (used in) financing activities | (5,578 | ) | 20,368 | (3,938 | ) | |||||
Net change in cash | (22,508 | ) | 23,165 | 2,036 | ||||||
Cash at beginning of year | 26,493 | 3,328 | 1,292 | |||||||
Cash at end of year | $ | 3,985 | 26,493 | 3,328 | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
CASH AND CASH EQUIVALENTS [Abstract] | |
Short term investment maturity period | 3 months |
INVESTMENT SECURITIES [Abstract] | |
Par value of FHLB share held (in dollars per share) | $100 |
ALLOWANCE FOR LOAN LOSSES [Abstract] | |
Minimum period due consumer loan | 120 days |
Period for measurement of loan component | 36 months |
Historical loss period | 3 years |
STOCK OPTIONS [Abstract] | |
Option vesting period | 5 years |
Premises [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Premises [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
ACQUISITION_Details
ACQUISITION (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Jan. 11, 2013 | Jan. 24, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 29, 2014 | |
Liabilities Assumed: | ||||||
Goodwill resulting from merger | $27,638,000 | $14,186,000 | $5,915,000 | |||
First Capital | ||||||
Consideration Paid: | ||||||
Common shares issued (888,811) | 12,354,000 | |||||
Cash paid to shareholders | 7,828,000 | |||||
Total value of consideration paid | 20,182,000 | |||||
Identifiable Assets Acquired: | ||||||
Cash and cash equivalents | 17,632,000 | |||||
Investment securities: | ||||||
Available-for-sale | 21,606,000 | |||||
Held-to-maturity | 384,000 | |||||
Federal Reserve Bank stock | 157,000 | |||||
Federal Home Loan Bank stock | 763,000 | |||||
Loans | 98,904,000 | |||||
Premises and equipment | 3,949,000 | |||||
Bank owned life insurance | 3,687,000 | |||||
Core deposit intangible | 2,574,000 | |||||
Other real estate owned | 127,000 | |||||
Deferred income taxes | 185,000 | |||||
Other assets | 1,380,000 | |||||
Total identifiable assets acquired | 151,348,000 | |||||
Liabilities Assumed: | ||||||
Deposits | 136,823,000 | |||||
Long-term debt | 1,792,000 | |||||
Other liabilities | 822,000 | |||||
Total liabilities assumed | 139,437,000 | |||||
Total Identifiable Net Assets Acquired | 11,911,000 | |||||
Goodwill resulting from merger | 8,271,000 | |||||
Unaudited pro forma information [Abstract] | ||||||
Shares issued (in shares) | 888,811 | |||||
Chillicothe, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 2 | |||||
Frankfort, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
Clarksburg, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
Washington Court House, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
Eaton National Bank | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 5 | |||||
Consideration Paid: | ||||||
Cash paid to shareholders | 24,750,000 | |||||
Total value of consideration paid | 24,750,000 | |||||
Identifiable Assets Acquired: | ||||||
Cash and cash equivalents | 15,635,000 | |||||
Investment securities: | ||||||
Available-for-sale | 35,859,000 | |||||
Federal Reserve Bank stock | 41,000 | |||||
Federal Home Loan Bank stock | 784,000 | |||||
Loans | 115,944,000 | |||||
Premises and equipment | 1,314,000 | |||||
Bank owned life insurance | 3,618,000 | |||||
Core deposit intangible | 2,466,000 | |||||
Other real estate owned | 262,000 | |||||
Other assets | 1,624,000 | |||||
Total identifiable assets acquired | 177,547,000 | |||||
Liabilities Assumed: | ||||||
Deposits | 165,335,000 | |||||
Short-term borrowings | 651,000 | |||||
Other liabilities | 263,000 | |||||
Total liabilities assumed | 166,249,000 | |||||
Total Identifiable Net Assets Acquired | 11,298,000 | |||||
Goodwill resulting from merger | 13,452,000 | |||||
Estimated amount of acquiree's total revenue and net income included in acquirer's income statement [Abstract] | ||||||
Total revenue | 6,608,000 | |||||
Net income | 2,997,000 | |||||
Unaudited pro forma information [Abstract] | ||||||
Total revenue | 44,768,000 | 47,183,000 | 43,287,000 | |||
Net income | 10,275,000 | 10,670,000 | 10,668,000 | |||
Basic earnings per common share (in dollars per share) | $1.11 | $1.36 | $1.28 | |||
Diluted earnings per common share (in dollars per share) | $1.09 | $1.34 | $1.26 | |||
New Paris, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
Lewisburg, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
West Alexandria, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 1 | |||||
Eaton, Ohio | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 2 | |||||
Citizens National Bank | ||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||||
Number of branches | 6 | |||||
BNB Bancorp, Inc. | ||||||
Consideration Paid: | ||||||
Total value of consideration paid | $12,574,170 |
ACQUISITIONS_NARRATIVE_Details
ACQUISITIONS, NARRATIVE (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |
Jan. 11, 2013 | Dec. 31, 2014 | Jan. 24, 2014 | Dec. 29, 2014 | |
Clarksburg, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 1 | |||
First Capital | ||||
Business Acquisition [Line Items] | ||||
Date of merger agreement | 9-Oct-12 | |||
Total value of consideration paid | $20,182,000 | |||
Core deposit intangible amortization period (in years) | 9 years | |||
Eaton National Bank | ||||
Business Acquisition [Line Items] | ||||
Date of merger agreement | 28-Oct-13 | |||
Total value of consideration paid | 24,750,000 | |||
Number of branches | 5 | |||
Core deposit intangible amortization period (in years) | 8 years | |||
BNB Bancorp, Inc. | ||||
Business Acquisition [Line Items] | ||||
Date of merger agreement | 29-Dec-14 | |||
Total value of consideration paid | 12,574,170 | |||
Shareholder cash entitlement (in dollars per share) | 15.75 | |||
Exhange ratio per share | 2.005 | |||
Historic value of total assets acquired | 108,800,000 | |||
Historical value of acquired net loans | 36,400,000 | |||
Historic value of acquired investments | 58,300,000 | |||
Historic value of assumed liabilities | 98,200,000 | |||
Historic value of assumed deposits | 97,900,000 | |||
Citizens National Bank | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 6 | |||
Chillicothe, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 2 | |||
Frankfort, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 1 | |||
Washington Court House, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 1 | |||
New Paris, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 1 | |||
Lewisburg, Ohio | ||||
Business Acquisition [Line Items] | ||||
Number of branches | 1 |
INVESTMENT_SECURITIES_AMORTIZE
INVESTMENT SECURITIES, AMORTIZED COST AND FAIR VALUE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | $283,661 | $260,728 |
Unrealized Gains | 3,710 | 3,657 |
Unrealized Losses | 2,006 | 6,144 |
Fair Value | 285,365 | 258,241 |
Investment Securities Held-to-Maturity: | ||
Amortized Cost | 22,725 | 16,323 |
Unrealized Gains | 108 | 159 |
Unrealized Losses | 695 | 286 |
Fair Value | 22,138 | 16,196 |
U.S. Treasury notes | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 62,406 | 13,184 |
Unrealized Gains | 290 | 0 |
Unrealized Losses | 136 | 290 |
Fair Value | 62,560 | 12,894 |
U.S. Agency notes | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 84,661 | 110,248 |
Unrealized Gains | 188 | 141 |
Unrealized Losses | 1,212 | 3,714 |
Fair Value | 83,637 | 106,675 |
U.S. Agency mortgage-backed securities | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 37,838 | 40,602 |
Unrealized Gains | 413 | 555 |
Unrealized Losses | 219 | 848 |
Fair Value | 38,032 | 40,309 |
Certificates of deposit | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 3,076 | 1,492 |
Unrealized Gains | 10 | 9 |
Unrealized Losses | 0 | 0 |
Fair Value | 3,086 | 1,501 |
Nontaxable Municipal Securities | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 75,727 | 74,185 |
Unrealized Gains | 1,972 | 2,116 |
Unrealized Losses | 304 | 968 |
Fair Value | 77,395 | 75,333 |
Investment Securities Held-to-Maturity: | ||
Amortized Cost | 22,525 | 15,923 |
Unrealized Gains | 108 | 159 |
Unrealized Losses | 695 | 285 |
Fair Value | 21,938 | 15,797 |
Taxable Municipal Securities | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 16,005 | 17,020 |
Unrealized Gains | 465 | 503 |
Unrealized Losses | 75 | 214 |
Fair Value | 16,395 | 17,309 |
Investment Securities Held-to-Maturity: | ||
Amortized Cost | 200 | 400 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 1 |
Fair Value | 200 | 399 |
Mutual funds | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 2,483 | 2,419 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 22 | 39 |
Fair Value | 2,461 | 2,380 |
Investment Securities Held-to-Maturity: | ||
Fair Value | 0 | |
Trust preferred securities | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 50 | 149 |
Unrealized Gains | 0 | 4 |
Unrealized Losses | 0 | 6 |
Fair Value | 50 | 147 |
Equity securities | ||
Investment Securities Available-for-Sale: | ||
Amortized Cost | 1,415 | 1,429 |
Unrealized Gains | 372 | 329 |
Unrealized Losses | 38 | 65 |
Fair Value | 1,749 | 1,693 |
Investment Securities Held-to-Maturity: | ||
Fair Value | $0 |
INVESTMENT_SECURITIES_CONTINUO
INVESTMENT SECURITIES, CONTINUOUS UNREALIZED LOSS POSITION (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | $23,792 | $141,755 |
Less Than 12 Months, Unrealized Losses | 123 | 4,428 |
12 Months or More, Fair Value | 102,601 | 26,955 |
12 Months or More, Unrealized Losses | 1,883 | 1,716 |
Investment Securities Held-to-Maturity: | ||
Less Than 12 Months, Fair Value | 8,152 | 5,289 |
Less Than 12 Months, Unrealized Losses | 540 | 286 |
12 Months or More, Fair Value | 4,200 | 0 |
12 Months or More, Unrealized Losses | 155 | 0 |
U.S. Treasury notes | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 9,141 | 12,894 |
Less Than 12 Months, Unrealized Losses | 7 | 290 |
12 Months or More, Fair Value | 8,774 | 0 |
12 Months or More, Unrealized Losses | 129 | 0 |
U.S. Agency notes | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 0 | 89,080 |
Less Than 12 Months, Unrealized Losses | 0 | 2,880 |
12 Months or More, Fair Value | 65,971 | 9,636 |
12 Months or More, Unrealized Losses | 1,212 | 834 |
U.S. Agency mortgage-backed securities | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 3,795 | 17,557 |
Less Than 12 Months, Unrealized Losses | 2 | 575 |
12 Months or More, Fair Value | 11,456 | 5,130 |
12 Months or More, Unrealized Losses | 217 | 273 |
Nontaxable Municipal Securities | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 7,211 | 15,641 |
Less Than 12 Months, Unrealized Losses | 58 | 398 |
12 Months or More, Fair Value | 11,419 | 10,751 |
12 Months or More, Unrealized Losses | 246 | 570 |
Investment Securities Held-to-Maturity: | ||
Less Than 12 Months, Fair Value | 8,152 | 4,890 |
Less Than 12 Months, Unrealized Losses | 540 | 285 |
12 Months or More, Fair Value | 4,200 | 0 |
12 Months or More, Unrealized Losses | 155 | 0 |
Taxable Municipal Securities | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 3,117 | 4,903 |
Less Than 12 Months, Unrealized Losses | 15 | 202 |
12 Months or More, Fair Value | 3,668 | 1,252 |
12 Months or More, Unrealized Losses | 60 | 12 |
Investment Securities Held-to-Maturity: | ||
Less Than 12 Months, Fair Value | 0 | 399 |
Less Than 12 Months, Unrealized Losses | 0 | 1 |
12 Months or More, Fair Value | 0 | 0 |
12 Months or More, Unrealized Losses | 0 | 0 |
Mutual funds | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 281 | 1,380 |
Less Than 12 Months, Unrealized Losses | 12 | 39 |
12 Months or More, Fair Value | 1,190 | 0 |
12 Months or More, Unrealized Losses | 10 | 0 |
Trust preferred securities | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 50 | 0 |
Less Than 12 Months, Unrealized Losses | 0 | 0 |
12 Months or More, Fair Value | 0 | 93 |
12 Months or More, Unrealized Losses | 0 | 6 |
Equity securities | ||
Investment Securities Available-for-Sale: | ||
Less Than 12 Months, Fair Value | 197 | 300 |
Less Than 12 Months, Unrealized Losses | 29 | 44 |
12 Months or More, Fair Value | 123 | 93 |
12 Months or More, Unrealized Losses | $9 | $21 |
INVESTMENT_SECURITIES_MATURITI
INVESTMENT SECURITIES, MATURITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available for Sale, Amortized Cost [Abstract] | ||
Due within one year | $10,961 | |
Due from one to five years | 133,901 | |
Due from five to ten years | 92,453 | |
Due after ten years | 4,560 | |
Available-for-Sale, Amortized Cost | 241,875 | |
Amortized Cost | 283,661 | 260,728 |
Available-for-sale, Fair Value [Abstract] | ||
Due within one year | 11,071 | |
Due from one to five years | 134,894 | |
Due from five to ten years | 92,493 | |
Due after ten years | 4,615 | |
Available-for-sale, at Fair Value | 243,073 | |
Available-for-sale, at fair value | 285,365 | 258,241 |
Held-to-maturity Securities, Amortized Cost [Abstract] | ||
Due within one year | 2,649 | |
Due from one to five years | 3,669 | |
Due from five to ten years | 4,175 | |
Due after ten years | 12,232 | |
Amortized Cost | 22,725 | 16,323 |
Held-to-maturity, Amortized Cost | 22,725 | |
Held-to-maturity Securities, Fair Value [Abstract] | ||
Due within one year | 2,661 | |
Due from one to five years | 3,665 | |
Due from five to ten years | 4,063 | |
Due after ten years | 11,749 | |
Fair Value | 22,138 | 16,196 |
U.S. Agency mortgage-backed securities | ||
Available for Sale, Amortized Cost [Abstract] | ||
Amortized Cost | 37,838 | |
Available-for-sale, Fair Value [Abstract] | ||
Available-for-sale, at fair value | 38,032 | |
Held-to-maturity Securities, Amortized Cost [Abstract] | ||
Held-to-maturity, Amortized Cost | 0 | |
Held-to-maturity Securities, Fair Value [Abstract] | ||
Fair Value | 0 | |
Mutual funds | ||
Available for Sale, Amortized Cost [Abstract] | ||
Amortized Cost | 2,483 | 2,419 |
Available-for-sale, Fair Value [Abstract] | ||
Available-for-sale, at fair value | 2,461 | 2,380 |
Held-to-maturity Securities, Amortized Cost [Abstract] | ||
Held-to-maturity, Amortized Cost | 0 | |
Held-to-maturity Securities, Fair Value [Abstract] | ||
Fair Value | 0 | |
Trust preferred securities | ||
Available for Sale, Amortized Cost [Abstract] | ||
Amortized Cost | 50 | |
Available-for-sale, Fair Value [Abstract] | ||
Available-for-sale, at fair value | 50 | |
Held-to-maturity Securities, Amortized Cost [Abstract] | ||
Held-to-maturity, Amortized Cost | 0 | |
Held-to-maturity Securities, Fair Value [Abstract] | ||
Fair Value | 0 | |
Equity securities | ||
Available for Sale, Amortized Cost [Abstract] | ||
Amortized Cost | 1,415 | 1,429 |
Available-for-sale, Fair Value [Abstract] | ||
Available-for-sale, at fair value | 1,749 | 1,693 |
Held-to-maturity Securities, Amortized Cost [Abstract] | ||
Held-to-maturity, Amortized Cost | 0 | |
Held-to-maturity Securities, Fair Value [Abstract] | ||
Fair Value | $0 |
INVESTMENT_SECURITIES_NARRATIV
INVESTMENT SECURITIES, NARRATIVE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments, Debt and Equity Securities [Abstract] | ||
Investment securities pledged as collateral | $175,094 | $157,956 |
INVESTMENT_SECURITIES_SALE_Det
INVESTMENT SECURITIES, SALE (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales of investment securities available-for-sale | $67,296 | $59,284 | $90,573 |
Gross realized gains | 252 | 1,234 | 1,860 |
Gross realized losses | $103 | $174 | $7 |
LOANS_MAJOR_CLASSIFICATION_OF_
LOANS, MAJOR CLASSIFICATION OF LOANS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | $698,810 | $574,382 |
Deferred origination costs (fees), net | 146 | -28 |
Balance, end of year | 698,956 | 574,354 |
Less allowance for loan losses | 3,121 | 3,588 |
Loans, net | 695,835 | 570,766 |
Commercial & industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 35,424 | 29,337 |
Balance, end of year | 35,434 | 29,306 |
Commercial, secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 379,141 | 314,252 |
Balance, end of year | 378,780 | 313,913 |
Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 254,087 | 215,587 |
Balance, end of year | 254,500 | 215,842 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 18,006 | 12,643 |
Balance, end of year | 18,090 | 12,730 |
Agricultural | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 11,472 | 2,472 |
Balance, end of year | 11,472 | 2,472 |
Other loans, including deposit overdrafts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans, including deferred net origination cost | 680 | 91 |
Balance, end of year | $680 | $91 |
LOANS_ACQUIRED_NONIMPAIRED_LOA
LOANS, ACQUIRED NON-IMPAIRED LOANS (Details) (Eaton National Bank, USD $) | Jan. 24, 2014 |
In Thousands, unless otherwise specified | |
Eaton National Bank | |
Acquired loans not impaired and not accounted for under FASB ASC 310-30 [Abstract] | |
Contractually required principal at acquisition | $102,483 |
Less fair value adjustment | 1,347 |
Fair value of acquired loans | 101,136 |
Contractual cash flows not expected to be collected | $1,702 |
LOANS_ACQUIRED_LOANS_ACQUIRED_
LOANS, ACQUIRED LOANS ACQUIRED IN ACCORDANCE WITH FASB 310-30 (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 24, 2014 |
In Thousands, unless otherwise specified | ||||
Business Acquisition [Line Items] | ||||
Interest component of expected cash flows (accretable discount) | ($2,674) | ($1,107) | $0 | |
Eaton National Bank | ||||
Business Acquisition [Line Items] | ||||
Contractually required principal at acquisition | 23,414 | |||
Contractual cash flows not expected to be collected (nonaccretable difference) | -6,088 | |||
Expected cash flows at acquisition | 17,326 | |||
Interest component of expected cash flows (accretable discount) | -2,163 | |||
Fair value of acquired impaired loans | $15,163 |
LOANS_PASTDUE_AND_ACCRUING_RES
LOANS, PAST-DUE, AND ACCRUING RESTRUCTURED LOANS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Financing receivables, non-accruals, past-due, and accruing restructured loans [Line Items] | ||
Total non-accrual loans | $5,599 | $2,961 |
Past-due 90 days or more and still accruing | 203 | 250 |
Total non-accrual and past-due 90 days or more and still accruing | 5,802 | 3,211 |
Accruing restructured loans | 14,269 | 15,151 |
Total | 20,071 | 18,362 |
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans | 0.83% | 0.56% |
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans | 2.87% | 3.20% |
Interest income | 665 | 229 |
Commercial & industrial | ||
Financing receivables, non-accruals, past-due, and accruing restructured loans [Line Items] | ||
Total non-accrual loans | 0 | 144 |
Past-due 90 days or more and still accruing | 0 | 0 |
Commercial, secured by real estate | ||
Financing receivables, non-accruals, past-due, and accruing restructured loans [Line Items] | ||
Total non-accrual loans | 4,277 | 1,418 |
Past-due 90 days or more and still accruing | 9 | 0 |
Agricultural | ||
Financing receivables, non-accruals, past-due, and accruing restructured loans [Line Items] | ||
Total non-accrual loans | 70 | 0 |
Past-due 90 days or more and still accruing | 0 | 0 |
Residential real estate | ||
Financing receivables, non-accruals, past-due, and accruing restructured loans [Line Items] | ||
Total non-accrual loans | 1,252 | 1,399 |
Past-due 90 days or more and still accruing | $177 | $236 |
LOANS_ALLOWANCES_FOR_CREDIT_LO
LOANS, ALLOWANCES FOR CREDIT LOSSES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for loan losses: | |||
Balance, beginning of year | $3,588 | $3,437 | $2,931 |
Change in classification | 0 | ||
Provision charged to expenses | 930 | 588 | 1,351 |
Losses charged off | -1,694 | -669 | -1,098 |
Recoveries | 297 | 232 | 253 |
Balance, end of year | 3,121 | 3,588 | 3,437 |
Individually evaluated for impairment | 514 | 1,032 | 904 |
Collectively evaluated for impairment | 2,304 | 2,556 | 2,533 |
Acquired credit impaired loans | 303 | 0 | |
Balance, end of year | 3,121 | 3,588 | 3,437 |
Loans: | |||
Individually evaluated for impairment | 15,179 | 16,846 | |
Collectively evaluated for impairment | 665,581 | 551,481 | |
Acquired credit impaired loans | 18,196 | 6,027 | |
Balance, end of year | 698,956 | 574,354 | |
Commercial & industrial | |||
Allowance for loan losses: | |||
Balance, beginning of year | 175 | 320 | 162 |
Change in classification | 18 | ||
Provision charged to expenses | 173 | -30 | 299 |
Losses charged off | -261 | -119 | -159 |
Recoveries | 42 | 4 | 0 |
Balance, end of year | 129 | 175 | 320 |
Individually evaluated for impairment | 10 | 2 | 159 |
Collectively evaluated for impairment | 119 | 173 | 161 |
Acquired credit impaired loans | 0 | 0 | |
Balance, end of year | 129 | 175 | 320 |
Loans: | |||
Individually evaluated for impairment | 401 | 165 | |
Collectively evaluated for impairment | 33,941 | 28,809 | |
Acquired credit impaired loans | 1,092 | 332 | |
Balance, end of year | 35,434 | 29,306 | |
Commercial, secured by real estate | |||
Allowance for loan losses: | |||
Balance, beginning of year | 2,520 | 2,296 | 1,941 |
Change in classification | -18 | ||
Provision charged to expenses | -20 | 256 | 536 |
Losses charged off | -573 | -58 | -234 |
Recoveries | 63 | 26 | 71 |
Balance, end of year | 1,990 | 2,520 | 2,296 |
Individually evaluated for impairment | 415 | 760 | 607 |
Collectively evaluated for impairment | 1,273 | 1,760 | 1,689 |
Acquired credit impaired loans | 302 | 0 | |
Balance, end of year | 1,990 | 2,520 | 2,296 |
Loans: | |||
Individually evaluated for impairment | 13,022 | 14,522 | |
Collectively evaluated for impairment | 352,774 | 295,028 | |
Acquired credit impaired loans | 12,984 | 4,363 | |
Balance, end of year | 378,780 | 313,913 | |
Residential real estate | |||
Allowance for loan losses: | |||
Balance, beginning of year | 826 | 712 | 656 |
Change in classification | 0 | ||
Provision charged to expenses | 712 | 327 | 535 |
Losses charged off | -652 | -244 | -486 |
Recoveries | 40 | 31 | 7 |
Balance, end of year | 926 | 826 | 712 |
Individually evaluated for impairment | 89 | 270 | 138 |
Collectively evaluated for impairment | 836 | 556 | 574 |
Acquired credit impaired loans | 1 | 0 | |
Balance, end of year | 926 | 826 | 712 |
Loans: | |||
Individually evaluated for impairment | 1,701 | 2,132 | |
Collectively evaluated for impairment | 249,374 | 212,378 | |
Acquired credit impaired loans | 3,425 | 1,332 | |
Balance, end of year | 254,500 | 215,842 | |
Consumer | |||
Allowance for loan losses: | |||
Balance, beginning of year | 66 | 108 | 166 |
Change in classification | 0 | ||
Provision charged to expenses | 18 | 12 | -47 |
Losses charged off | -129 | -181 | -134 |
Recoveries | 108 | 127 | 123 |
Balance, end of year | 63 | 66 | 108 |
Individually evaluated for impairment | 0 | 0 | 0 |
Collectively evaluated for impairment | 63 | 66 | 108 |
Acquired credit impaired loans | 0 | 0 | |
Balance, end of year | 63 | 66 | 108 |
Loans: | |||
Individually evaluated for impairment | 55 | 27 | |
Collectively evaluated for impairment | 17,954 | 12,703 | |
Acquired credit impaired loans | 81 | 0 | |
Balance, end of year | 18,090 | 12,730 | |
Agricultural | |||
Allowance for loan losses: | |||
Balance, beginning of year | 0 | 0 | 0 |
Change in classification | 0 | ||
Provision charged to expenses | 11 | 0 | 0 |
Losses charged off | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Balance, end of year | 11 | 0 | 0 |
Individually evaluated for impairment | 0 | 0 | 0 |
Collectively evaluated for impairment | 11 | 0 | 0 |
Acquired credit impaired loans | 0 | 0 | |
Balance, end of year | 11 | 0 | 0 |
Loans: | |||
Individually evaluated for impairment | 0 | 0 | |
Collectively evaluated for impairment | 11,371 | 2,472 | |
Acquired credit impaired loans | 101 | 0 | |
Balance, end of year | 11,472 | 2,472 | |
Other | |||
Allowance for loan losses: | |||
Balance, beginning of year | 1 | 1 | 6 |
Change in classification | 0 | ||
Provision charged to expenses | 36 | 23 | 28 |
Losses charged off | -79 | -67 | -85 |
Recoveries | 44 | 44 | 52 |
Balance, end of year | 2 | 1 | 1 |
Individually evaluated for impairment | 0 | 0 | 0 |
Collectively evaluated for impairment | 2 | 1 | 1 |
Acquired credit impaired loans | 0 | 0 | |
Balance, end of year | 2 | 1 | 1 |
Loans: | |||
Individually evaluated for impairment | 0 | 0 | |
Collectively evaluated for impairment | 167 | 91 | |
Acquired credit impaired loans | 513 | 0 | |
Balance, end of year | $680 | $91 |
LOANS_ADDITIONAL_INFORMATION_D
LOANS, ADDITIONAL INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Residential real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Home equity lines of credit draw period of residential real estate loans | 5 years |
Minimum | Commercial, secured by real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortization period of loan products | 5 years |
Balloon payment terms of loan products | 1 year |
Adjustable interest rate periods of loan products | 1 year |
Minimum | Residential real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortization period of loan products | 5 years |
Loan to appraised value ratio of loan products | 80.00% |
Maximum | Commercial, secured by real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortization period of loan products | 25 years |
Balloon payment terms of loan products | 10 years |
Adjustable interest rate periods of loan products | 10 years |
Loan to appraised value ratio of loan products | 75.00% |
Maximum | Residential real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortization period of loan products | 30 years |
Maximum | Consumer | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortization period of loan products | 72 months |
LOANS_LOANS_PORTFOLIO_BY_CREDI
LOANS, LOANS PORTFOLIO BY CREDIT QUALITY INDICATORS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | $698,956 | $574,354 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 664,546 | 546,877 |
OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 7,341 | 5,147 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 27,069 | 22,330 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Commercial & industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 35,434 | 29,306 |
Commercial & industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 34,322 | 27,563 |
Commercial & industrial | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 44 |
Commercial & industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 1,112 | 1,699 |
Commercial & industrial | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Commercial, secured by real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 378,780 | 313,913 |
Commercial, secured by real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 353,957 | 295,189 |
Commercial, secured by real estate | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 6,421 | 3,967 |
Commercial, secured by real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 18,402 | 14,757 |
Commercial, secured by real estate | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Residential real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 254,500 | 215,842 |
Residential real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 246,335 | 208,881 |
Residential real estate | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 920 | 1,136 |
Residential real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 7,245 | 5,825 |
Residential real estate | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 18,090 | 12,730 |
Consumer | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 17,979 | 12,681 |
Consumer | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Consumer | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 111 | 49 |
Consumer | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Agricultural | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 11,472 | 2,472 |
Agricultural | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 11,273 | 2,472 |
Agricultural | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Agricultural | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 199 | 0 |
Agricultural | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 680 | 91 |
Other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 680 | 91 |
Other | OAEM | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | 0 | 0 |
Other | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans, net of deferred income | $0 | $0 |
LOANS_LOANS_PORTFOLIO_AGING_AN
LOANS, LOANS PORTFOLIO AGING ANALYSIS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | $1,890 | $2,488 |
60-89 Days Past Due | 478 | 916 |
Greater Than 90 Days | 4,485 | 2,935 |
Total Past Due | 6,853 | 6,339 |
Current | 692,103 | 568,015 |
Balance, end of year | 698,956 | 574,354 |
Total Loans Greater Than 90 Days and Accruing | 203 | 250 |
Commercial & industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 4 | 277 |
60-89 Days Past Due | 0 | 0 |
Greater Than 90 Days | 0 | 144 |
Total Past Due | 4 | 421 |
Current | 35,430 | 28,885 |
Balance, end of year | 35,434 | 29,306 |
Total Loans Greater Than 90 Days and Accruing | 0 | 0 |
Commercial, secured by real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 1,000 | 951 |
60-89 Days Past Due | 83 | 582 |
Greater Than 90 Days | 3,179 | 1,174 |
Total Past Due | 4,262 | 2,707 |
Current | 374,518 | 311,206 |
Balance, end of year | 378,780 | 313,913 |
Total Loans Greater Than 90 Days and Accruing | 9 | 0 |
Residential real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 648 | 1,131 |
60-89 Days Past Due | 297 | 299 |
Greater Than 90 Days | 1,289 | 1,604 |
Total Past Due | 2,234 | 3,034 |
Current | 252,266 | 212,808 |
Balance, end of year | 254,500 | 215,842 |
Total Loans Greater Than 90 Days and Accruing | 177 | 236 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 59 | 38 |
60-89 Days Past Due | 28 | 35 |
Greater Than 90 Days | 17 | 13 |
Total Past Due | 104 | 86 |
Current | 17,986 | 12,644 |
Balance, end of year | 18,090 | 12,730 |
Total Loans Greater Than 90 Days and Accruing | 17 | 14 |
Agricultural | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 73 | 0 |
60-89 Days Past Due | 70 | 0 |
Greater Than 90 Days | 0 | 0 |
Total Past Due | 143 | 0 |
Current | 11,329 | 2,472 |
Balance, end of year | 11,472 | 2,472 |
Total Loans Greater Than 90 Days and Accruing | 0 | 0 |
Other | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 106 | 91 |
60-89 Days Past Due | 0 | 0 |
Greater Than 90 Days | 0 | 0 |
Total Past Due | 106 | 91 |
Current | 574 | 0 |
Balance, end of year | 680 | 91 |
Total Loans Greater Than 90 Days and Accruing | $0 | $0 |
LOANS_IMPAIRED_LOANS_Details
LOANS, IMPAIRED LOANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
With no related allowance recorded [Abstract] | |||
Recorded Investment | $27,884,000 | $13,311,000 | $9,978,000 |
Unpaid Principal Balance | 35,882,000 | 15,815,000 | 10,373,000 |
Average Recorded Investment | 30,678,000 | 14,677,000 | 10,705,000 |
Interest Income Recognized | 1,990,000 | 971,000 | 400,000 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 5,491,000 | 9,562,000 | 5,180,000 |
Unpaid Principal Balance | 6,229,000 | 9,685,000 | 6,035,000 |
Related Allowance | 817,000 | 1,032,000 | 904,000 |
Average Recorded Investment | 5,471,000 | 8,694,000 | 5,850,000 |
Interest Income Recognized | 182,000 | 300,000 | 173,000 |
Total [Abstract] | |||
Recorded Investment | 33,375,000 | 22,873,000 | 15,158,000 |
Unpaid Principal Balance | 42,111,000 | 25,500,000 | 16,408,000 |
Average Recorded Investment | 36,149,000 | 23,371,000 | 16,555,000 |
Interest Income Recognized | 2,172,000 | 1,271,000 | 573,000 |
Interest income recognized on a cash basis | 8,000 | 0 | 0 |
Commercial & industrial | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 1,092,000 | 332,000 | 0 |
Unpaid Principal Balance | 2,077,000 | 531,000 | 0 |
Average Recorded Investment | 1,823,000 | 700,000 | 975,000 |
Interest Income Recognized | 161,000 | 35,000 | 43,000 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 401,000 | 165,000 | 264,000 |
Unpaid Principal Balance | 406,000 | 270,000 | 822,000 |
Related Allowance | 10,000 | 2,000 | 159,000 |
Average Recorded Investment | 319,000 | 186,000 | 374,000 |
Interest Income Recognized | 19,000 | 2,000 | 0 |
Total [Abstract] | |||
Recorded Investment | 1,493,000 | 497,000 | 264,000 |
Unpaid Principal Balance | 2,483,000 | 801,000 | 822,000 |
Average Recorded Investment | 2,142,000 | 886,000 | 1,349,000 |
Interest Income Recognized | 180,000 | 37,000 | 43,000 |
Commercial, secured by real estate | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 21,987,000 | 10,883,000 | 9,541,000 |
Unpaid Principal Balance | 26,715,000 | 12,317,000 | 9,936,000 |
Average Recorded Investment | 23,360,000 | 11,612,000 | 9,310,000 |
Interest Income Recognized | 1,373,000 | 748,000 | 350,000 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 4,019,000 | 7,725,000 | 4,258,000 |
Unpaid Principal Balance | 4,538,000 | 7,725,000 | 4,360,000 |
Related Allowance | 717,000 | 760,000 | 660,000 |
Average Recorded Investment | 4,108,000 | 7,368,000 | 4,765,000 |
Interest Income Recognized | 117,000 | 252,000 | 171,000 |
Total [Abstract] | |||
Recorded Investment | 26,006,000 | 18,608,000 | 13,799,000 |
Unpaid Principal Balance | 31,253,000 | 20,042,000 | 14,296,000 |
Average Recorded Investment | 27,468,000 | 18,980,000 | 14,075,000 |
Interest Income Recognized | 1,490,000 | 1,000,000 | 521,000 |
Residential real estate | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 4,074,000 | 2,096,000 | 417,000 |
Unpaid Principal Balance | 5,549,000 | 2,967,000 | 417,000 |
Average Recorded Investment | 4,645,000 | 2,345,000 | 397,000 |
Interest Income Recognized | 379,000 | 182,000 | 5,000 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 1,052,000 | 1,645,000 | 658,000 |
Unpaid Principal Balance | 1,265,000 | 1,663,000 | 853,000 |
Related Allowance | 90,000 | 270,000 | 85,000 |
Average Recorded Investment | 1,026,000 | 1,123,000 | 707,000 |
Interest Income Recognized | 44,000 | 44,000 | 2,000 |
Total [Abstract] | |||
Recorded Investment | 5,126,000 | 3,741,000 | 1,075,000 |
Unpaid Principal Balance | 6,814,000 | 4,630,000 | 1,270,000 |
Average Recorded Investment | 5,671,000 | 3,468,000 | 1,104,000 |
Interest Income Recognized | 423,000 | 226,000 | 7,000 |
Consumer | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 117,000 | 0 | 20,000 |
Unpaid Principal Balance | 178,000 | 0 | 20,000 |
Average Recorded Investment | 179,000 | 7,000 | 23,000 |
Interest Income Recognized | 14,000 | 0 | 2,000 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 19,000 | 27,000 | 0 |
Unpaid Principal Balance | 20,000 | 27,000 | 0 |
Related Allowance | 0 | 0 | 0 |
Average Recorded Investment | 18,000 | 17,000 | 4,000 |
Interest Income Recognized | 2,000 | 2,000 | 0 |
Total [Abstract] | |||
Recorded Investment | 136,000 | 27,000 | 20,000 |
Unpaid Principal Balance | 198,000 | 27,000 | 20,000 |
Average Recorded Investment | 197,000 | 24,000 | 27,000 |
Interest Income Recognized | 16,000 | 2,000 | 2,000 |
Agricultural | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 101,000 | 0 | 0 |
Unpaid Principal Balance | 619,000 | 0 | 0 |
Average Recorded Investment | 121,000 | 13,000 | 0 |
Interest Income Recognized | 20,000 | 6,000 | 0 |
With an allowance recorded [Abstract] | |||
Recorded Investment | 0 | 0 | 0 |
Unpaid Principal Balance | 0 | 0 | 0 |
Related Allowance | 0 | 0 | 0 |
Average Recorded Investment | 0 | 0 | 0 |
Interest Income Recognized | 0 | 0 | 0 |
Total [Abstract] | |||
Recorded Investment | 101,000 | 0 | 0 |
Unpaid Principal Balance | 619,000 | 0 | 0 |
Average Recorded Investment | 121,000 | 13,000 | 0 |
Interest Income Recognized | 20,000 | 6,000 | 0 |
Other | |||
With no related allowance recorded [Abstract] | |||
Recorded Investment | 513,000 | ||
Unpaid Principal Balance | 744,000 | ||
Average Recorded Investment | 550,000 | ||
Interest Income Recognized | 43,000 | ||
With an allowance recorded [Abstract] | |||
Recorded Investment | 0 | ||
Unpaid Principal Balance | 0 | ||
Related Allowance | 0 | ||
Average Recorded Investment | 0 | ||
Interest Income Recognized | 0 | ||
Total [Abstract] | |||
Recorded Investment | 513,000 | ||
Unpaid Principal Balance | 744,000 | ||
Average Recorded Investment | 550,000 | ||
Interest Income Recognized | $43,000 |
LOANS_TROUBLED_DEBT_RESTRUCTUR
LOANS, TROUBLED DEBT RESTRUCTURING AND MORTGAGE SERVICING RIGHTS (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 |
Loan | Loan | |||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Number of Loans | 15 | 12 | ||
Pre-Modification Recorded Balance | $1,676 | $2,151 | ||
Post-Modification Recorded Balance | 1,676 | 2,151 | ||
Modified impaired loans without a valuation allowance | 1,329 | 327 | ||
Modified impaired loans with valuation allowance | 299 | 1,141 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Balance, beginning of year | 498 | 475 | 418 | 475 |
Amount capitalized to mortgage servicing rights | 292 | 191 | 283 | |
Amortization of mortgage servicing rights | -199 | -168 | -226 | |
Balance, end of year | 591 | 498 | 475 | |
Federal Home Loan Mortgage Corporation and Other Investors [Member] | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Unpaid principal balances of loans sold and serviced for the Federal Home Loan Mortgage Corporation | 120,433 | 90,343 | 71,568 | |
Commercial & industrial | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Number of Loans | 8 | 1 | ||
Pre-Modification Recorded Balance | 658 | 22 | ||
Post-Modification Recorded Balance | 340 | 22 | ||
Commercial, secured by real estate | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Number of Loans | 2 | 3 | ||
Pre-Modification Recorded Balance | 896 | 1,594 | ||
Post-Modification Recorded Balance | 1,214 | 1,594 | ||
Residential real estate | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Number of Loans | 2 | 6 | ||
Pre-Modification Recorded Balance | 82 | 508 | ||
Post-Modification Recorded Balance | 82 | 508 | ||
Consumer | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Number of Loans | 3 | 2 | ||
Pre-Modification Recorded Balance | 40 | 27 | ||
Post-Modification Recorded Balance | 40 | 27 | ||
Auto loan | ||||
Loan modifications classified as troubled debt restructurings [Abstract] | ||||
Restructured automobile loan charged off | $13 |
ACQUIRED_CREDIT_IMPAIRED_LOANS2
ACQUIRED CREDIT IMPAIRED LOANS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | $698,810 | $574,382 |
Less allowance for loan losses | 3,121 | 3,588 |
Loans, net | 695,835 | 570,766 |
Commercial & industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 35,424 | 29,337 |
Commercial, secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 379,141 | 314,252 |
Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 254,087 | 215,587 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 18,006 | 12,643 |
Agricultural | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 11,472 | 2,472 |
Other loans, including deposit overdrafts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 680 | 91 |
Financial Receivable Acquired Credit Impaired | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 18,196 | 6,027 |
Less allowance for loan losses | 303 | 0 |
Loans, net | 17,893 | 6,027 |
Financial Receivable Acquired Credit Impaired | Commercial & industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 1,092 | 332 |
Financial Receivable Acquired Credit Impaired | Commercial, secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 12,984 | 4,363 |
Financial Receivable Acquired Credit Impaired | Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 3,425 | 1,332 |
Financial Receivable Acquired Credit Impaired | Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 81 | 0 |
Financial Receivable Acquired Credit Impaired | Agricultural | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | 101 | 0 |
Financial Receivable Acquired Credit Impaired | Other loans, including deposit overdrafts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired | $513 | $0 |
ACQUIRED_CREDIT_IMPAIRED_LOANS3
ACQUIRED CREDIT IMPAIRED LOANS, OUTSTANDING BALANCE AND CARRYING AMOUNT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Acquired Credit Impaired Loans [Abstract] | ||
Outstanding balance | $26,697 | $8,220 |
Carrying amount | $18,196 | $6,027 |
ACQUIRED_CREDIT_IMPAIRED_LOANS4
ACQUIRED CREDIT IMPAIRED LOANS, ACCRETABLE DISCOUNT RELATED TO ACQUIRED IMPAIRED LOANS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Accretable discount, beginning of year | $1,107 | $0 |
Accretable discount acquired during period | 2,163 | 1,389 |
Reclass from nonaccretable discount to accretable discount | 177 | 157 |
Less disposals | -249 | -23 |
Less accretion | -524 | -416 |
Accretable discount, end of year | $2,674 | $1,107 |
OTHER_REAL_ESTATE_OWNED_Detail
OTHER REAL ESTATE OWNED (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Other Real Estate [Roll Forward] | ||
Balance, beginning of year | $1,463 | $2,189 |
Additions | 480 | 133 |
Additions due to merger | 262 | 127 |
Reductions due to sales | -735 | -909 |
Reductions due to valuation write downs | -100 | -77 |
Balance, end of year | 1,370 | 1,463 |
Other real estate owned [Abstract] | ||
Amount | 1,370 | 1,463 |
Commercial real estate | ||
Other Real Estate [Roll Forward] | ||
Balance, end of year | 1,265 | 1,415 |
Other real estate owned [Abstract] | ||
Amount | 1,265 | 1,415 |
Residential real estate | ||
Other Real Estate [Roll Forward] | ||
Balance, end of year | 105 | 48 |
Other real estate owned [Abstract] | ||
Amount | $105 | $48 |
PREMISES_AND_EQUIPMENT_Details
PREMISES AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $38,449 | $36,304 | |
Less accumulated depreciation | 17,716 | 16,407 | |
Premises and equipment, net | 20,733 | 19,897 | |
Depreciation charged | 1,479 | 1,456 | 1,256 |
Land | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 6,045 | 5,354 | |
Buildings | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 19,728 | 18,778 | |
Equipment | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 12,627 | 12,172 | |
Construction in progress | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $49 | $0 |
LEASES_Details
LEASES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Leases [Abstract] | |||
Lease expiration year | through 2050 | ||
Minimum annual rentals payment [Abstract] | |||
2015 | $473 | ||
2016 | 406 | ||
2017 | 285 | ||
2018 | 198 | ||
2019 | 155 | ||
Thereafter | 3,869 | ||
Total | 5,386 | ||
Rental expenses | $537 | $484 | $451 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, CHANGES IN GOODWILL (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Balance, beginning of year | $14,186 | $5,915 |
Additions from acquisitions | 13,452 | 8,271 |
Balance, end of year | $27,638 | $14,186 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, OTHER INTANGIBLE ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other intangible assets included in other assets [Abstract] | ||
Gross Intangible Assets | $6,458 | $4,043 |
Accumulated Amortization | 1,678 | 1,248 |
Net Intangible Assets | 4,780 | 2,795 |
Core deposit intangibles | ||
Other intangible assets included in other assets [Abstract] | ||
Gross Intangible Assets | 5,040 | 2,917 |
Accumulated Amortization | 851 | 620 |
Net Intangible Assets | 4,189 | 2,297 |
Mortgage servicing rights | ||
Other intangible assets included in other assets [Abstract] | ||
Gross Intangible Assets | 1,418 | 1,126 |
Accumulated Amortization | 827 | 628 |
Net Intangible Assets | $591 | $498 |
GOODWILL_AND_OTHER_INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, ESTIMATED AGGREGATE FUTURE AMORTIZATION EXPENSE (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Estimated aggregate future amortization expense [Abstract] | |
2015 | $747 |
2016 | 721 |
2017 | 697 |
2018 | 677 |
2019 | $661 |
CERTIFICATES_OF_DEPOSIT_Detail
CERTIFICATES OF DEPOSIT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Contractual maturities of time deposits [Abstract] | ||
2015 | $102,283 | |
2016 | 48,294 | |
2017 | 12,418 | |
2018 | 17,908 | |
2019 | 26,887 | |
Thereafter | 6,345 | |
Time deposits | 214,135 | |
Time deposits of $250,000 or more | 24,374 | |
Time deposits of $100,000 or more | $64,772 |
BORROWINGS_FUNDS_BORROWED_FROM
BORROWINGS, FUNDS BORROWED FROM FHLB (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fixed Rate Advances, with monthly principal and interest payments | ||
Debt Instrument [Line Items] | ||
Long-term debt | $11,357 | $12,102 |
Fixed Rate Advances, Due January 2015 | Fixed Rate Advances, due at maturity | ||
Debt Instrument [Line Items] | ||
Interest rate, period end | 2.00% | |
Long-term debt | 5,000 | 5,000 |
Fixed Rate Advances, Due March 2017 | Fixed Rate Advances, due at maturity | ||
Debt Instrument [Line Items] | ||
Interest rate, period end | 5.25% | |
Long-term debt | 5,000 | 5,000 |
Fixed Rate Advances, Due March 2014 | Fixed Rate Advances, with monthly principal and interest payments | ||
Debt Instrument [Line Items] | ||
Interest rate, period end | 2.45% | |
Long-term debt | 0 | 265 |
Fixed Rate Advances, Due March 2019 | Fixed Rate Advances, with monthly principal and interest payments | ||
Debt Instrument [Line Items] | ||
Interest rate, period end | 2.82% | |
Long-term debt | $1,357 | $1,837 |
BORROWINGS_SHORT_TERM_DEBT_Det
BORROWINGS, SHORT TERM DEBT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Short-term Debt [Line Items] | ||
Amount | $16,645 | $8,655 |
Rate | 0.30% | 0.10% |
Line of credit | ||
Short-term Debt [Line Items] | ||
Amount | 5,021 | 0 |
Rate | 0.75% | 0.00% |
Repurchase agreements | ||
Short-term Debt [Line Items] | ||
Amount | $11,624 | $8,655 |
Rate | 0.10% | 0.10% |
BORROWINGS_NARRATIVE_Details
BORROWINGS, NARRATIVE (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
institution | ||
Debt Disclosure [Abstract] | ||
Pledged financial instruments for Federal Home Loan Bank | $212,000,000 | $183,000,000 |
FHLB remaining borrowing capacity | 100,800,000 | |
Number of financial institution | 3 | |
First arrangement short term borrowings | 7,000,000 | |
Second arrangement short term borrowings | 10,000,000 | |
Third arrangement short term borrowings | 20,000,000 | |
Variable rate basis | federal funds rate | |
Basis point spread | 50.00% | |
Short-term advances under Cash Management Advance program | 46,500,000 | |
Variable rate interest rate terms | 90 days | |
Fixed interest rate terms | 30 days | |
Expiration date for Cash Management Advance program | 28-Aug-15 | |
Maximum short-term borrowing at month end | 12,927,000 | 15,165,000 |
Short-term borrowing average balances | 11,367,000 | 11,376,000 |
Short term borrowing held by member of board of director | $1,200,000 | $700,000 |
INCOME_TAXES_PROVISION_FOR_FED
INCOME TAXES, PROVISION FOR FEDERAL INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Provision for federal income taxes [Abstract] | |||||||||||
Income taxes currently payable | $3,194 | $2,750 | $2,764 | ||||||||
Deferred income tax provision (benefit) | 192 | 192 | 31 | ||||||||
Provision for income taxes | $1,228 | $953 | $841 | $364 | $797 | $804 | $824 | $517 | $3,386 | $2,942 | $2,795 |
INCOME_TAXES_EFFECTIVE_INCOME_
INCOME TAXES, EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation between the statutory income tax and effective tax rate [Abstract] | |||
Statutory tax rate | 34.00% | 34.00% | 34.00% |
Increase (decrease) resulting from - | |||
Tax exempt interest | -6.80% | -7.20% | -7.20% |
Tax exempt income on bank owned life insurance | -1.70% | -2.00% | -1.80% |
Other b net | 0.00% | 0.30% | 0.30% |
Effective tax rate | 25.50% | 25.10% | 25.30% |
INCOME_TAXES_DEFERRED_TAX_ASSE
INCOME TAXES, DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Allowance for loan losses | $1,061 | $1,148 |
Net unrealized losses on investment securities available-for-sale | 470 | 846 |
Fair value adjustment on loans acquired from merger with First Capital | 847 | 1,184 |
Write-down of other real estate owned | 196 | 196 |
Pension and deferred compensation | 849 | 1,304 |
Other | 274 | 107 |
Deferred tax assets, gross | 3,697 | 4,785 |
Deferred tax liabilities: | ||
Depreciation of premises and equipment | -1,280 | -1,408 |
Amortization of intangibles | -840 | -950 |
Deferred loan fees | -3 | 0 |
FHLB stock dividends | -349 | -345 |
Fair value adjustment on securities acquired from merger with First Capital | -70 | -143 |
Deferred tax liabilities, gross | -2,542 | -2,846 |
Net deferred tax assets (liabilities) | $1,155 | $1,939 |
INCOME_TAXES_NARRATIVE_Details
INCOME TAXES, NARRATIVE (Details) (USD $) | 36 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $0 | $0 |
Unrecognized interest and penalties | $0 |
COMMITMENTS_AND_CONTINGENT_LIA2
COMMITMENTS AND CONTINGENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | $93,286 | $85,320 |
Commitments outstanding for capital expenditures | 112 | |
Commercial loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 5,152 | 9,316 |
Other loans | Fixed rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 877 | 852 |
Other loans | Adjustable rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 2,011 | 1,653 |
Unused lines of credit | Fixed rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 6,496 | 3,404 |
Unused lines of credit | Adjustable rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 67,981 | 60,236 |
Unused overdraft protection amounts on demand and NOW accounts | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | 10,206 | 9,494 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risks, liability | $563 | $365 |
REGULATORY_MATTERS_NARRATIVE_D
REGULATORY MATTERS, NARRATIVE (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Jul. 27, 2011 | Nov. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 09, 2009 |
Banking and Thrift [Abstract] | ||||||
Minimum cash reserve balance with Federal Reserve Bank | $11,766 | $9,128 | ||||
Cash Reserve balance | 18,638 | 11,730 | ||||
Dividend payable from retained earnings without affecting capital position | 4,073 | |||||
Issuance of common stock (in shares) | 1,642,857 | |||||
Proceeds from issuance of common stock | $26,900 | $58 | $26,950 | $49 | ||
Shares available for issuance under Dividend Reinvestment and Stock Purchase Plan (in shares) | 400,000 | |||||
Number of warrants outstanding | 2 | |||||
Warrants to purchase common shares (in shares) | 217,063 | |||||
Warrants to purchase common shares exercise price (in dollars per share) | $9.26 | |||||
Warrants to purchase common shares | 10 years | |||||
Warrants vested at grant | 100.00% |
REGULATORY_MATTERS_Details
REGULATORY MATTERS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Minimum Requirement | ||||
Ratio of tier 1 capital to risk-weighted assets | 4.00% | 4.00% | ||
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 8.00% | 8.00% | ||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 3.00% | 3.00% | ||
To Be Considered Well-Capitalized | ||||
Ratio of tier 1 capital to risk-weighted assets | 6.00% | 6.00% | ||
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 10.00% | 10.00% | ||
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 5.00% | 5.00% | ||
Regulatory Capital: | ||||
Shareholders' Equity | $125,695 | $118,873 | $82,006 | $77,960 |
Consolidated Company | ||||
Regulatory Capital: | ||||
Shareholders' Equity | 125,695 | 118,873 | ||
Goodwill and other intangibles | -31,886 | -16,532 | ||
Accumulated other comprehensive income | -785 | 1,722 | ||
Tier 1 risk-based capital | 93,024 | 104,063 | ||
Eligible allowance for loan losses | 3,121 | 3,588 | ||
Total risk-based capital | 96,145 | 107,651 | ||
Capital Ratios: | ||||
Total risk-based | 14.38% | 18.65% | ||
Tier 1 risk-based | 13.92% | 18.03% | ||
Leverage | 8.53% | 11.10% | ||
Bank | ||||
Regulatory Capital: | ||||
Shareholders' Equity | 119,350 | 90,438 | ||
Goodwill and other intangibles | -31,886 | -16,532 | ||
Accumulated other comprehensive income | -583 | 1,856 | ||
Tier 1 risk-based capital | 86,881 | 75,762 | ||
Eligible allowance for loan losses | 3,121 | 3,588 | ||
Total risk-based capital | $90,002 | $79,350 | ||
Capital Ratios: | ||||
Total risk-based | 13.50% | 13.81% | ||
Tier 1 risk-based | 13.03% | 13.18% | ||
Leverage | 7.98% | 8.10% |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME, CHANGES IN AOCI (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of year | ($1,722) | $4,721 |
Before reclassifications | 2,605 | -5,633 |
Reclassifications | -98 | -810 |
Balance at end of year | 785 | -1,722 |
Unrealized Gains and Losses on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of year | -1,641 | 4,875 |
Before reclassifications | 2,865 | -5,706 |
Reclassifications | -98 | -810 |
Balance at end of year | 1,126 | -1,641 |
Changes in Pension Plan Assets and Benefit Obligations | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of year | -81 | -154 |
Before reclassifications | -260 | 73 |
Reclassifications | 0 | 0 |
Balance at end of year | ($341) | ($81) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE INCOME, RECLASSIFICATION OF AOCI (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Realized gain on sales of securities | $149 | $1,060 | $1,853 | ||||||||
Less provision for income taxes | 1,228 | 953 | 841 | 364 | 797 | 804 | 824 | 517 | 3,386 | 2,942 | 2,795 |
Unrealized Gains and Losses on Available-for-Sale Securities | Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Realized gain on sales of securities | 149 | 1,060 | |||||||||
Adjustment for change in unrealized gain between sale date and previous quarter-end | 0 | 168 | |||||||||
Income (loss) from continuing operations | 149 | 1,228 | |||||||||
Less provision for income taxes | 51 | 418 | |||||||||
Reclassification adjustment, net of taxes | $98 | $810 |
RETIREMENT_PLANS_NARRATIVE_Det
RETIREMENT PLANS, NARRATIVE (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2014 | Jul. 01, 2013 | Feb. 01, 2009 |
age_and_service | ||||||
Defined Contribution Plan [Abstract] | ||||||
Age plus vesting service (less than, in years) | 65 | |||||
Employer's matching contribution to 401(k) of employees hired on or after January 1, 2009 | 50.00% | |||||
Maximum annual contribution per employee, percent | 3.00% | |||||
Automatic Annual Contribution Employees Hired After January 1, 2009 Benefit Reduction Under Certain Amendments Minimum | 5.00% | |||||
Automatic Annual Contribution Employees Hired After January 1, 2009 Due Benefit Reduction Under Certain Amendments Maximum | 7.00% | |||||
Defined benefit plan, funded percentage | 80.00% | 80.00% | ||||
Employer expected contribution to 401 (k) plan in next fiscal year | $335 | |||||
Deferred Compensation Arrangements | ||||||
Deferred Compensation Arrangements [Abstract] | ||||||
Accrued interest on deferred compensation | 8.00% | |||||
Deferred compensation liability | 3,012 | 2,732 | ||||
Supplemental Employee Retirement Plan | ||||||
Supplemental income plan [Abstract] | ||||||
Projected benefit obligation | 1,106 | 1,040 | ||||
Discount rate | 5.30% | 5.30% | ||||
Service cost | 43 | 111 | 20 | |||
Interest cost | 56 | 47 | 20 | |||
Qualified noncontributory defined benefit retirement plan | ||||||
Defined Contribution Plan [Abstract] | ||||||
Expected contribution by employer to noncontributory defined benefit plan | 158 | |||||
Nonqualified defined benefit retirement plan | ||||||
Supplemental income plan [Abstract] | ||||||
Discount rate | 3.95% | 4.95% | 4.05% | |||
Service cost | 68 | 71 | 89 | |||
Interest cost | 60 | 46 | 43 | |||
Recognized in other liabilities nonqualified defined benefit retirement plan | 1,741 | 1,213 | ||||
Accumulated benefit obligation under nonqualified defined benefit retirement plan | 1,633 | 1,022 | ||||
Future amortization of prior service cost | 172 | |||||
Citizens National Bank | ||||||
Defined Contribution Plan [Abstract] | ||||||
Qualified noncontributory defined benefit pension plan liability | $31 |
RETIREMENT_PLANS_COSTS_OF_RETI
RETIREMENT PLANS, COSTS OF RETIREMENT PLANS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
401(k) plan expense | $326 | $294 | $275 |
Qualified noncontributory defined benefit retirement plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan expense | $967 | $486 | $355 |
RETIREMENT_PLANS_NET_PERIODIC_
RETIREMENT PLANS, NET PERIODIC BENEFIT COSTS (Details) (Nonqualified defined benefit retirement plan, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Nonqualified defined benefit retirement plan | |||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |||
Service cost | $68 | $71 | $89 |
Interest cost | 60 | 46 | 43 |
Amortization of unrecognized (gain) loss | 0 | 25 | 20 |
Amortization of unrecognized prior service cost | 15 | 29 | 29 |
Net periodic pension cost | $143 | $171 | $181 |
RETIREMENT_PLANS_CHANGES_IN_PR
RETIREMENT PLANS, CHANGES IN PROJECTED BENEFIT OBLIGATION (Details) (Nonqualified defined benefit retirement plan, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Nonqualified defined benefit retirement plan | |||
Reconciliation of changes in projected benefit obligation [Abstract] | |||
Projected benefit obligation at beginning of year | $1,213 | $1,153 | $969 |
Service cost | 68 | 71 | 89 |
Interest cost | 60 | 46 | 43 |
Actuarial (gain) or loss | 407 | -57 | 52 |
Benefits paid | -7 | 0 | 0 |
Projected benefit obligation at end of year | $1,741 | $1,213 | $1,153 |
RETIREMENT_PLANS_AMOUNTS_RECOG
RETIREMENT PLANS, AMOUNTS RECOGNIZED IN AOCI (Details) (Nonqualified defined benefit retirement plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Nonqualified defined benefit retirement plan | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract] | |||
Net actuarial (gain)/loss | $339 | $70 | $125 |
Past service cost | 0 | 10 | 29 |
Total | $339 | $80 | $154 |
RETIREMENT_PLANS_ASSUMPTIONS_U
RETIREMENT PLANS, ASSUMPTIONS USED (Details) (Nonqualified defined benefit retirement plan) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Nonqualified defined benefit retirement plan | |||
Benefit obligation: | |||
Discount rate | 3.95% | 4.95% | 4.05% |
Salary increase rate | 2.00% | 3.00% | 3.00% |
Net periodic pension cost: | |||
Discount rate | 4.95% | 4.05% | 4.40% |
Salary increase rate | 3.00% | 3.00% | 3.00% |
Amortization period in years | 3 years 11 months 12 days | 2 years 11 months 27 days | 3 years |
RETIREMENT_PLANS_ESTIMATED_FUT
RETIREMENT PLANS, ESTIMATED FUTURE BENEFIT PAYMENTS (Details) (Nonqualified defined benefit retirement plan, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Nonqualified defined benefit retirement plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions, next fiscal year | $0 |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2015 | 68,000 |
2016 | 73,000 |
2017 | 127,000 |
2018 | 126,000 |
2019 | 126,000 |
2020-2023 | $626,000 |
STOCK_BASED_COMPENSATION_NARRA
STOCK BASED COMPENSATION, NARRATIVE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period options granted to date vest ratably | 5 years | ||
Weighted-average remaining contractual life for options exercisable | 4 years 3 months 13 days | ||
Aggregate intrinsic value for option outstanding | $334 | ||
Aggregate intrinsic value of options exercisable | 274 | ||
Cash received in connection with the exercise of stock options | 70 | 28 | |
Exercise of stock options (in shares) | 0 | 5,620 | 2,144 |
Cash paid on cancellation of stock options | 6 | ||
Stock option cancellation (in shares) | 6,532 | ||
Aggregate intrinsic value of stock options exercised | 41 | ||
Total expense related to options included in salaries and wages | 24 | 37 | 41 |
Tax benefit from compensation expense | 8 | 13 | 14 |
Option awards to be recognized | $27 | ||
Stock Compensation Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized for issuance (in shares) | 200,000 | ||
Ownership Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period options granted to date vest ratably | 5 years | ||
Period options granted expires after date of grant | 10 years |
STOCK_BASED_COMPENSATION_STOCK
STOCK BASED COMPENSATION, STOCK OPTIONS, BY EXERCISE PRICE (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding stock options, number (in shares) | 99,810 |
Outstanding stock option, weighted average exercise price (in dollars per share) | $12.16 |
Outstanding stock option, weighted average remaining contractual life | 4 years 8 months 8 days |
Exercisable stock options, number (in shares) | 79,909 |
Exercisable stock option, weighted average exercise price (in dollars per shares) | $12.18 |
Exercisable stock options, weighted average remaining contractual life | 4 years 3 months 13 days |
9.00 - $10.99 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $9 |
Exercise price range, upper range limit (in dollars per share) | $10.99 |
Outstanding stock options, number (in shares) | 23,494 |
Outstanding stock option, weighted average exercise price (in dollars per share) | $9 |
Outstanding stock option, weighted average remaining contractual life | 4 years 27 days |
Exercisable stock options, number (in shares) | 23,494 |
Exercisable stock option, weighted average exercise price (in dollars per shares) | $9 |
Exercisable stock options, weighted average remaining contractual life | 4 years 27 days |
11.00 - $12.99 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $11 |
Exercise price range, upper range limit (in dollars per share) | $12.99 |
Outstanding stock options, number (in shares) | 63,354 |
Outstanding stock option, weighted average exercise price (in dollars per share) | $12.05 |
Outstanding stock option, weighted average remaining contractual life | 5 years 6 months 18 days |
Exercisable stock options, number (in shares) | 43,453 |
Exercisable stock option, weighted average exercise price (in dollars per shares) | $12.04 |
Exercisable stock options, weighted average remaining contractual life | 5 years 2 months 12 days |
17.00 - $18.99 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $17 |
Exercise price range, upper range limit (in dollars per share) | $18.99 |
Outstanding stock options, number (in shares) | 12,962 |
Outstanding stock option, weighted average exercise price (in dollars per share) | $18.41 |
Outstanding stock option, weighted average remaining contractual life | 1 year 7 months 5 days |
Exercisable stock options, number (in shares) | 12,962 |
Exercisable stock option, weighted average exercise price (in dollars per shares) | $18.41 |
Exercisable stock options, weighted average remaining contractual life | 1 year 7 months 5 days |
STOCK_BASED_COMPENSATION_STOCK1
STOCK BASED COMPENSATION, STOCK OPTION ACTIVITY (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options outstanding [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 104,966 | ||
Granted (in shares) | 0 | ||
Exercised or canceled (in shares) | 0 | -5,620 | -2,144 |
Expired (in shares) | -5,156 | ||
Outstanding at end of period (in shares) | 99,810 | 104,966 | |
Exercisable at end of period (in shares) | 79,909 | ||
Weighted average exercise price [Roll forward] | |||
Outstanding at beginning of period (in dollars per share) | $12.43 | ||
Granted (in dollars per shares) | $0 | ||
Exercised or cancelled (in dollars per share) | $0 | ||
Expired (in dollars per share) | $17.66 | ||
Outstanding at end of period (in dollars per share) | $12.16 | $12.43 | |
Exercisable at end of period (in dollars per share) | $12.18 |
STOCK_BASED_COMPENSATION_ASSUM
STOCK BASED COMPENSATION, ASSUMPTIONS USED (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Fair Value Assumptions and Methodology [Abstract] | |
Estimated weighted-average fair value of options granted (in dollars per share) | $2.80 |
Risk-free interest rate | 0.84% |
Average dividend (in dollars per share) | $0.64 |
Volatility factor of the expected market price of the company's common stock | 39.56% |
Average life in years | 6 years 6 months |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||
Net income | $9,869 | $8,780 | $8,270 |
Weighted average number of shares outstanding used in the calculation of basic earnings per common share (in shares) | 9,297,019 | 7,852,514 | 6,717,357 |
Add dilutive effect of: | |||
Stock options (in shares) | 18,545 | 23,456 | 19,205 |
Stock warrants (in shares) | 90,782 | 107,027 | 65,913 |
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share (in shares) | 9,406,346 | 7,982,997 | 6,802,475 |
Earnings per common share: | |||
Basic (in dollars per share) | $1.06 | $1.12 | $1.23 |
Diluted (in dollars per share) | $1.05 | $1.10 | $1.22 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average price per share of common stock excluded from computation of earnings per share (in dollars per share) | $12.16 | $12.43 | |
Stock Compensation Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 12,962 | 6,400 | 2,248 |
Weighted-average price per share of common stock excluded from computation of earnings per share (in dollars per share) | $18.41 | $18.95 | $15.44 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Related parties transaction [Roll Forward] | ||
Beginning balances | $1,001 | $1,108 |
Additions | 594 | 217 |
Reductions | -403 | -324 |
Ending Balance | 1,192 | 1,001 |
Deposits from related parties | $3,507 | $3,338 |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS, AT FAIR VALUE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Recurring fair value measurements | ||
Investment securities available-for-sale: | ||
U.S. Treasury notes | $62,560 | $12,894 |
U.S. Agency notes | 83,637 | 106,675 |
U.S. Agency mortgage-backed securities | 38,032 | 40,309 |
Certificate of Deposit, Fair Value Disclosure | 3,086 | 1,501 |
Municipal securities: | ||
Non-taxable | 77,395 | 75,333 |
Taxable | 16,395 | 17,309 |
Mutual funds | 2,461 | 2,380 |
Trust preferred securities | 50 | 147 |
Equity securities | 1,749 | 1,693 |
Total recurring fair value measurements | 285,365 | 258,241 |
Recurring fair value measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Investment securities available-for-sale: | ||
U.S. Treasury notes | 62,560 | 12,894 |
U.S. Agency notes | 0 | 0 |
U.S. Agency mortgage-backed securities | 0 | 0 |
Certificate of Deposit, Fair Value Disclosure | 0 | 0 |
Municipal securities: | ||
Non-taxable | 0 | 0 |
Taxable | 0 | 0 |
Mutual funds | 1,461 | 1,380 |
Trust preferred securities | 50 | 147 |
Equity securities | 1,749 | 1,693 |
Total recurring fair value measurements | 65,820 | 16,114 |
Recurring fair value measurements | Significant Other Observable Inputs (Level 2) | ||
Investment securities available-for-sale: | ||
U.S. Treasury notes | 0 | 0 |
U.S. Agency notes | 83,637 | 106,675 |
U.S. Agency mortgage-backed securities | 38,032 | 40,309 |
Certificate of Deposit, Fair Value Disclosure | 3,086 | 1,501 |
Municipal securities: | ||
Non-taxable | 77,395 | 75,333 |
Taxable | 16,395 | 17,309 |
Mutual funds | 1,000 | 1,000 |
Trust preferred securities | 0 | 0 |
Equity securities | 0 | 0 |
Total recurring fair value measurements | 219,545 | 242,127 |
Recurring fair value measurements | Significant Unobservable Inputs (Level 3) | ||
Investment securities available-for-sale: | ||
U.S. Treasury notes | 0 | 0 |
U.S. Agency notes | 0 | 0 |
U.S. Agency mortgage-backed securities | 0 | 0 |
Certificate of Deposit, Fair Value Disclosure | 0 | 0 |
Municipal securities: | ||
Non-taxable | 0 | 0 |
Taxable | 0 | 0 |
Mutual funds | 0 | 0 |
Trust preferred securities | 0 | 0 |
Equity securities | 0 | 0 |
Total recurring fair value measurements | 0 | 0 |
Nonrecurring fair value measurements | ||
Nonrecurring fair value measurements: | ||
Impaired loans | 4,872 | 8,530 |
Other real estate owned and repossessed assets | 1,370 | 1,463 |
Total nonrecurring fair value measurements | 6,242 | 9,993 |
Nonrecurring fair value measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Nonrecurring fair value measurements: | ||
Impaired loans | 0 | 0 |
Other real estate owned and repossessed assets | 0 | 0 |
Total nonrecurring fair value measurements | 0 | 0 |
Nonrecurring fair value measurements | Significant Other Observable Inputs (Level 2) | ||
Nonrecurring fair value measurements: | ||
Impaired loans | 0 | 773 |
Other real estate owned and repossessed assets | 0 | 1,463 |
Total nonrecurring fair value measurements | 0 | 2,236 |
Nonrecurring fair value measurements | Significant Unobservable Inputs (Level 3) | ||
Nonrecurring fair value measurements: | ||
Impaired loans | 4,872 | 7,757 |
Other real estate owned and repossessed assets | 1,370 | 0 |
Total nonrecurring fair value measurements | $6,242 | $7,757 |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS, QUANTITATIVE INFORMATION ABOUT UNOBSERVABLE INPUTS USED IN RECURRING AND NONRECURRING LEVEL 3 INPUTS (Details) (Nonrecurring fair value measurements, Significant Unobservable Inputs (Level 3), USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Impaired loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 4,872 | $7,757 |
Impaired loans | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 4.00% | |
Impaired loans | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 10.50% | |
Impaired loans | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 5.36% | |
Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,370 |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS, BY BALANCE SHEET GROUPING (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
FINANCIAL ASSETS: | ||
Investment securities, held-to-maturity | $22,138 | $16,196 |
Carrying Amount | ||
FINANCIAL ASSETS: | ||
Cash and cash equivalents | 15,845 | 14,688 |
Investment securities, held-to-maturity | 22,725 | 16,323 |
Federal Reserve Bank stock | 2,346 | 1,603 |
Federal Home Loan Bank stock | 3,638 | 2,854 |
Loans, net | 695,835 | 570,766 |
FINANCIAL LIABILITIES: | ||
Deposits | 946,205 | 785,761 |
Short-term borrowings | 16,645 | 8,655 |
Long-term debt | 11,357 | 12,102 |
Fair Value | ||
FINANCIAL ASSETS: | ||
Cash and cash equivalents | 15,845 | 14,688 |
Investment securities, held-to-maturity | 22,138 | 16,196 |
Federal Reserve Bank stock | 2,346 | 1,603 |
Federal Home Loan Bank stock | 3,638 | 2,854 |
Loans, net | 699,715 | 573,163 |
FINANCIAL LIABILITIES: | ||
Deposits | 947,541 | 788,096 |
Short-term borrowings | 16,645 | 8,655 |
Long-term debt | 11,944 | 12,842 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
FINANCIAL ASSETS: | ||
Cash and cash equivalents | 15,845 | 14,688 |
Federal Reserve Bank stock | 2,346 | 1,603 |
Federal Home Loan Bank stock | 3,638 | 2,854 |
FINANCIAL LIABILITIES: | ||
Deposits | 731,766 | 599,838 |
Short-term borrowings | 16,645 | 8,655 |
Significant Other Observable Inputs (Level 2) | ||
FINANCIAL ASSETS: | ||
Loans, net | 773 | |
FINANCIAL LIABILITIES: | ||
Deposits | 215,775 | 188,258 |
Long-term debt | 11,944 | 12,842 |
Significant Unobservable Inputs (Level 3) | ||
FINANCIAL ASSETS: | ||
Investment securities, held-to-maturity | 22,138 | 16,196 |
Loans, net | $699,715 | $572,390 |
QUARTERLY_RESULTS_OF_OPERATION2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $10,367 | $9,906 | $9,926 | $9,278 | $8,566 | $8,450 | $8,405 | $8,076 | $39,477 | $33,497 | $29,938 |
Interest expense | 844 | 911 | 920 | 915 | 927 | 995 | 1,045 | 1,098 | 3,590 | 4,065 | 4,889 |
NET INTEREST INCOME | 9,523 | 8,995 | 9,006 | 8,363 | 7,639 | 7,455 | 7,360 | 6,978 | 35,887 | 29,432 | 25,049 |
Provision for loan losses | 193 | 401 | 255 | 81 | 219 | 178 | 42 | 149 | 930 | 588 | 1,351 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 9,330 | 8,594 | 8,751 | 8,282 | 7,420 | 7,277 | 7,318 | 6,829 | 34,957 | 28,844 | 23,698 |
Total non-interest income | 2,449 | 2,315 | 2,301 | 2,077 | 2,358 | 2,047 | 2,178 | 2,507 | 9,142 | 9,090 | 9,049 |
Total non-interest expenses | 7,334 | 7,238 | 7,600 | 8,672 | 6,634 | 6,163 | 6,324 | 7,091 | 30,844 | 26,212 | 21,682 |
INCOME BEFORE INCOME TAXES | 4,445 | 3,671 | 3,452 | 1,687 | 3,144 | 3,161 | 3,172 | 2,245 | 13,255 | 11,722 | 11,065 |
PROVISION FOR INCOME TAXES | 1,228 | 953 | 841 | 364 | 797 | 804 | 824 | 517 | 3,386 | 2,942 | 2,795 |
NET INCOME | $3,217 | $2,718 | $2,611 | $1,323 | $2,347 | $2,357 | $2,348 | $1,728 | $9,869 | $8,780 | $8,270 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $0.34 | $0.30 | $0.28 | $0.14 | $0.27 | $0.31 | $0.31 | $0.23 | |||
Diluted (in dollars per share) | $0.34 | $0.29 | $0.28 | $0.14 | $0.27 | $0.30 | $0.30 | $0.23 |
PARENT_COMPANY_FINANCIAL_INFOR2
PARENT COMPANY FINANCIAL INFORMATION - CONDENSED BALANCE SHEETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
ASSETS: | ||||
Investment securities available-for-sale, at fair value | $285,365 | $258,241 | ||
Other assets | 7,225 | 9,705 | ||
TOTAL ASSETS | 1,108,066 | 932,338 | ||
Liabilities | 982,371 | 813,465 | ||
Shareholders' equity | 125,695 | 118,873 | 82,006 | 77,960 |
TOTAL LIABILITES AND SHAREHOLDERS' EQUITY | 1,108,066 | 932,338 | ||
Parent Company | ||||
ASSETS: | ||||
Cash on deposit with subsidiary | 3,985 | 26,493 | ||
Investment securities available-for-sale, at fair value | 1,970 | 2,019 | ||
Investment in subsidiary | 119,350 | 90,437 | ||
Other assets | 419 | 33 | ||
TOTAL ASSETS | 125,724 | 118,982 | ||
Liabilities | 29 | 109 | ||
Shareholders' equity | 125,695 | 118,873 | ||
TOTAL LIABILITES AND SHAREHOLDERS' EQUITY | $125,724 | $118,982 |
PARENT_COMPANY_FINANCIAL_INFOR3
PARENT COMPANY FINANCIAL INFORMATION - CONDENSED STATEMENTS OF INCOME (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income: | |||||||||||
Interest and dividends | $10,367 | $9,906 | $9,926 | $9,278 | $8,566 | $8,450 | $8,405 | $8,076 | $39,477 | $33,497 | $29,938 |
INCOME BEFORE INCOME TAXES | 4,445 | 3,671 | 3,452 | 1,687 | 3,144 | 3,161 | 3,172 | 2,245 | 13,255 | 11,722 | 11,065 |
Income tax (expense) benefit | -1,228 | -953 | -841 | -364 | -797 | -804 | -824 | -517 | -3,386 | -2,942 | -2,795 |
NET INCOME | 3,217 | 2,718 | 2,611 | 1,323 | 2,347 | 2,357 | 2,348 | 1,728 | 9,869 | 8,780 | 8,270 |
Parent Company | |||||||||||
Income: | |||||||||||
Dividends from subsidiaries | 8,800 | 10,525 | 3,800 | ||||||||
Interest and dividends | 91 | 89 | 110 | ||||||||
Net gain on sales of securities | 10 | 124 | 63 | ||||||||
Total income | 8,901 | 10,738 | 3,973 | ||||||||
Total expenses | 1,077 | 127 | 107 | ||||||||
INCOME BEFORE INCOME TAXES | 7,824 | 10,611 | 3,866 | ||||||||
Income tax (expense) benefit | 350 | -12 | -1 | ||||||||
Equity in undistributed income (loss) of subsidiaries | 1,695 | -1,819 | 4,405 | ||||||||
NET INCOME | $9,869 | $8,780 | $8,270 |
PARENT_COMPANY_FINANCIAL_INFOR4
PARENT COMPANY FINANCIAL INFORMATION - CONDENSED STATEMENTS OF CASH FLOWS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $9,869 | $8,780 | $8,270 |
Adjustments for non-cash items - | |||
NET CASH FLOWS FROM OPERATING ACTIVITIES | 15,940 | 10,446 | 10,989 |
Cash flows from investing activities: | |||
Purchases of securities available-for-sale | -92,180 | -74,083 | -132,836 |
Proceeds from sales of available-for-sale securities | 67,296 | 59,284 | 90,573 |
Cash paid for business acquisition | -9,114 | 9,771 | 0 |
NET CASH FLOWS USED IN INVESTING ACTIVITIES | -11,002 | -587 | -5,511 |
Cash flows from financing activities: | |||
Principal payments on long-term debt | -745 | -3,395 | -7,668 |
Proceeds from issuance of common stock | 58 | 26,950 | 49 |
Cash dividends paid on common stock | -5,636 | -4,860 | -4,016 |
NET CASH FLOWS USED IN FINANCING ACTIVITIES | -3,781 | -8,646 | -11,538 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 1,157 | 1,213 | -6,060 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 14,688 | 13,475 | 19,535 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 15,845 | 14,688 | 13,475 |
Parent Company | |||
Cash flows from operating activities: | |||
Net income | 9,869 | 8,780 | 8,270 |
Adjustments for non-cash items - | |||
(Increase) decrease in undistributed income of subsidiaries | -1,695 | 1,819 | -4,405 |
Other, net | -474 | 7 | -403 |
NET CASH FLOWS FROM OPERATING ACTIVITIES | 7,700 | 10,606 | 3,462 |
Cash flows from investing activities: | |||
Purchases of securities available-for-sale | -107 | -563 | -872 |
Proceeds from sales of available-for-sale securities | 227 | 569 | 3,384 |
Cash paid for business acquisition | -24,750 | -7,815 | 0 |
NET CASH FLOWS USED IN INVESTING ACTIVITIES | -24,630 | -7,809 | 2,512 |
Cash flows from financing activities: | |||
Principal payments on long-term debt | 0 | -1,792 | 0 |
Proceeds from issuance of common stock | 372 | 27,238 | 333 |
Cash dividends paid on common stock | -5,950 | -5,148 | -4,299 |
Other | 0 | 70 | 28 |
NET CASH FLOWS USED IN FINANCING ACTIVITIES | -5,578 | 20,368 | -3,938 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -22,508 | 23,165 | 2,036 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 26,493 | 3,328 | 1,292 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $3,985 | $26,493 | $3,328 |